Codelco jumps into the lithium space with Lithium Power acquisition

PERTH (miningweekly.com) – Chilean copper major Codelco has made a A$385-million takeover offer for ASX-listed Lithium Power International (LPI), offering 57c a share under a scheme of arrangement.

The offer represented a premium of 119% to LPI’s closing share price on September 26, and a 136% premium to the company’s 30-day volume weighted average share price, up to the undisturbed date.

The board of Lithium International has unanimously recommended that shareholders vote in favour of the transaction, in the absence of a superior offer, and subject to an independent expert concluding that it was in the best interest of shareholders.

“The transaction announced today provides LPI shareholders with an opportunity to realise an attractive cash amount of A$0.57 per Lithium Power share, reflecting a compelling premium of ~119% over the closing share price of A$0.26 per Lithium Power share on September 26, 2023, being the trading day prior to Lithium Power's response to media speculation regarding discussions with Codelco,” said MD and CEO Cristobal Garcia-Huidobro.

“The transaction provides certainty for Lithium Power shareholders when compared to a standalone development scenario of the company’s Maricunga lithium project and in the context of an uncertain economic outlook more broadly.

“We believe this transaction is a great outcome for Lithium Power shareholders and for other stakeholders including employees, suppliers and the people of Chile, all of whom will benefit from the Maricunga lithium project being developed by a large, well-financed and experienced mine developer and producer such as Codelco.

“The board believes this transaction reflects the hard work and achievements of the Lithium Power team and the significant progress made in advancing the Maricunga lithium project to its current pre-development stage.”

The agreement represents Codelco’s first foray into lithium, with company chairperson Máximo Pacheco saying that the acquisition of Lithium Power was a logical consolidation within the lithium landscape of the Salar de Maricunga and positioned it strongly to execute the company’s strategy of becoming a globally relevant supplier of critical metals to enable the energy transition, and comply with the National Lithium Strategy.

"The acquisition of Lithium Power will make the Blanco project viable through synergies with Codelco's assets and permits in the Salar de Maricunga. It will enable us to develop a globally outstanding lithium project with exceptional sustainability credentials. We expect that this will generate value for Codelco as well as for our country and in the regions, especially for neighbouring communities.”

Lithium Power’s major shareholder, Minera Salar Blanco SpA, which currently owns a 28.25% interest in the company, has confirmed that it intends to vote in favour of the scheme, in the absence of a superior proposal and subject to the independent expert concluding it was in the best interests of Lithium Power shareholders.

The scheme is not subject to any financing or due diligence conditions, but is subject to shareholder and court approvals, as well as Foreign Investment Review Board approval.