Lithium Australia casts doubt on Lepidico report

PERTH (miningweekly.com) – ASX-listed Lithium Australia has called into question the independent expert's report for its proposed takeover of fellow-listed Lepidico.

The company on Friday said it had reviewed the independent expert's report, which had found that the offer was neither fair nor reasonable, and had valued Lepidico shares at between 1.6c and 2.1c each. Lithium Australia found the independent expert's report to be inaccurate.

Lithium Australia employed Leadenhall Corporate Advisory to undertake a review of the independent expert's report, and Leadenhall found that the independent expert should have been of the opinion that Lithium Australia’s offer was both fair and reasonable.

Leadenhall alleged that the independent expert placed too much reliance on the quoted market price analysis where there was not a deep and liquid market for the shares to support the analysis, and that the expert had used an inappropriate time period to select the minority trading price.

The company said the independent expert also used a control premium that was at the high end of the range commonly applied, with inadequate justification, and that the expert had not justified why the value per share selected was significantly higher than the value calculated using their sum of the parts methodology.

Lithium Australia earlier launched a A$23.8-million off-market scrip bid for Lepidico, offering that company’s shareholders one of its own shares for every 13 Lepidico shares held.

The off-market takeover offer is currently scheduled to close on April 18.