Market News

Lithium Stocks Soar after Albemarle’s Bid for Liontown

Lithium stocks including Albemarle Corp. (ALB), Piedmont Lithium (PLL), Lithium Americas (LAC), and Sigma Lithium (SGML) were on an upswing on Tuesday as news came in that Albemarle, the specialty chemicals manufacturing company made a bid for Liontown Resources at A$2.50 per share. Liontown Resources controls two major lithium mines in Western Australia including its flagship Kathleen Valley project which is currently in the pre-production stage.

Albemarle’s bid represented a premium of approximately 64% to Liontown’s last closing price on the Australian stock exchange and valued Liontown at A$5.50 billion ($3.66 billion).

However, Liontown rejected this proposal and “determined that (the proposal) substantially undervalues Liontown, and therefore is not in the best interests of shareholders.” The company also pointed out that a subsidiary of Albemarle, RT Lithium is building a stake in Liontown through on-market purchases and now holds approximately 2.2% of the company.

As the demand for EVs soars, the demand for lithium is also increasing. This has led to a strong buzz of mergers in the lithium mining sector. Last month, there were reports that EV major, Tesla (TSLA) could also be interested in acquiring SGML.

For investors interested in gaining exposure to lithium mining stocks, the Global X Lithium & Battery Tech ETF (LIT) is a good option and the ETF has gained 4.9% in the past three months.

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