Lithium Power International Ltd (ASX:LPI) has entered into a binding scheme implementation deed (SID) with Corporación Nacional del Cobre de Chile (Codelco) under a deal in which Codelco will acquire 100% of LPI’s issued capital, valuing the company at approximately A$385 million.
Under the terms of the SID, LPI shareholders will receive A$0.57 in cash per LPI share, a significant premium of 119% compared to the undisturbed closing share price of A$0.26 per share on September 26, 2023, and a 136% premium compared to the undisturbed 30-day volume weighted average price (VWAP) of A$0.242 per LPI share.
Both the LPI board and its major shareholder Minera Salar Blanco SpA will vote in favour of the scheme, in the absence of a superior proposal and subject to an independent expert concluding the SID is in the best interests of LPI shareholders.
Transaction “provides certainty”
“The transaction announced today provides LPI shareholders with an opportunity to realise an attractive cash amount of A$0.57 per LPI share, reflecting a compelling premium of 119% over the closing share price of A$0.26 per LPI share on September 26, 2023, being the trading day prior to LPI's response to media speculation regarding discussions with Codelco,” Lithium Power International CEO and managing director Cristobal Garcia-Huidobro said.
“The transaction provides certainty for LPI shareholders when compared to a stand-alone 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 LPI 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 as Codelco.
“The board believes this transaction reflects the hard work and achievements of the LPI team and the significant progress made in advancing the Maricunga Lithium Project to its current predevelopment stage.”
Major shareholder Minera Salar Blanco SpA – which currently owns 28.25% of LPI shares – has confirmed it intends to vote all of the LPI shares that it owns or controls in favour of the scheme, subject to independent expert conclusions and the absence of a better offer.
About Codelco
Codelco is a Chilean State-owned company and the world’s largest copper producer, which controls approximately 5.4% of the world’s proven and probable copper reserves; as defined by the US Geological Survey.
Codelco also has a lithium division with mining tenements and key strategic permits to develop lithium projects in the Maricunga and Pedernales salt flats, and the National Lithium Strategy announced by the Chilean Government in April 2023 entrusted Codelco with the development of lithium projects through public-private associations.