Lithium Americas to acquire Arena Minerals in transaction valued at $227M

Lithium Americas Corp. (LAC) and Arena Minerals Inc. (AMRZF) are pleased to announce that they have entered into a definitive arrangement agreement pursuant to which Lithium Americas has agreed to acquire all of the issued and outstanding common shares of Arena not already owned by Lithium Americas by way of a plan of arrangement. Pursuant to the Arrangement Agreement, Arena’s shareholders will receive 0.0226 of a Lithium Americas common share for each Arena Share held. The Consideration to Arena implies a total equity transaction value of $227M, based on the closing price on December 19, 2022, which would result in Arena Shareholders owning approximately 5.7% of Lithium Americas. Arena appointed a special committee of independent directors to consider and make a recommendation to the board of directors of Arena with respect to the Transaction. After consultation with its financial and legal advisors, and on the unanimous recommendation of the Special Committee, the Arena Board unanimously determined that the Transaction is in the best interests of Arena, and approved the Arrangement Agreement. Accordingly, the Arena Board recommendation that Arena Shareholders, option holders and warrant holders vote in favour of the Transaction. The Board Recommendation is made to all Arena Securityholders excluding Lithium Americas and Ganfeng Lithium. The Special Committee received a fairness opinion from Stifel GMP., which was retained on a fixed-fee independent fairness opinion basis, which states that as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Arena Securityholders pursuant to the Transaction is fair, from a financial point of view, to the Arena Securityholders. The Transaction will be effected by way of a court-approved plan of arrangement under the Business Corporations Act and will be subject to the approval of: 66 2/3% of votes cast by Arena Shareholders; 66 2/3% of votes cast by Arena Securityholders, voting together as a single class; and a simple majority of the votes cast by Arena Shareholders excluding for this purpose the votes held by any person required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, at a special meeting of Arena Securityholders expected to be held in Q1 2023. In addition to Arena Securityholder approval, the Transaction is also subject to the receipt of certain regulatory and court approvals, including the approvals of the TSX, NYSE and the TSX Venture Exchange, any required approval under the Investment Canada Act, and other closing conditions customary in transactions of this nature. The Transaction provides for, among other things, customary Arena Board support and non-solicitation covenants, with a "fiduciary out" that would allow Arena to accept a superior proposal, subject to a "right to match" period in favour of Lithium Americas. The Arrangement Agreement also provides for, among other matters, a termination fee of US$9.1 million payable by Arena to Lithium Americas in certain specified circumstances, and a reverse termination fee of US$9.1 million payable by Lithium Americas to Arena in certain other specified circumstances. All directors and senior officers of Arena have entered into support and voting agreements pursuant to which they have agreed to vote their Arena securities in favour of the Transaction. Pursuant to the Arrangement Agreement, unless otherwise excluded, all outstanding Arena warrant and stock options, which remain unexercised at the effective time of the Transaction, will be deemed to be exercised on a "cashless exercise" basis under the arrangement for Arena Shares, which will be exchanged for LAC Shares at the Exchange Ratio. Ganfeng Lithium Co. Ltd., GFL International Co. Ltd. and their affiliates, which collectively owns approximately 16% of the outstanding Arena Shares and Arena Warrants that if exercised would represent a further 6% ownership of Arena, has entered into a support and disposition agreement committing to use commercially reasonable efforts to dispose of all of its securities of Arena prior to closing of the Transaction. Further, the Arrangement Agreement provides that in the event that such securities held by Ganfeng are not disposed prior to closing of the Transaction, Lithium Americas will acquire such securities for cash rather than issue new shares of the Company as part of the Transaction subject to a maximum cash payment of C$75 million. Subject to certain conditions, including the Parties obtaining the requisite regulatory approvals, the Transaction is expected to close by Q3 2023. Upon closing of the Transaction, the Arena Shares are expected to be concurrently delisted from the TSX-V. The delisting is conditional upon TSX-V approval.