It has been a much-needed positive session for the lithium industry on Tuesday.
In morning trade, ASX lithium shares of all shapes and sizes are recording particularly strong gains.
Here's a summary of what's happening in the industry today:
- The Allkem Ltd (ASX: AKE) share price is up 12% to $11.38
- The Core Lithium Ltd (ASX: CXO) share price is up 19% to 93 cents
- The Global Lithium Resources Ltd (ASX: GL1) share price is up 13% to $1.22
- The Liontown Resources Ltd (ASX: LTR) share price is up 51% to $2.31
- The Pilbara Minerals Ltd (ASX: PLS) share price is up 15% to $3.96
- The Sayona Mining Ltd (ASX: SYA) share price is up 13% to 21 cents
- The WA1 Resources Ltd (ASX: WA1) share price is up 10% to $1.13
Why are ASX lithium shares rocketing higher?
Investors have been piling into ASX lithium shares on Tuesday after Liontown Resources revealed that it has received and rejected a takeover approach from US$26 billion industry giant Albemarle Corp (NYSE: ALB).
According to the release, after having two prior proposals rejected, this week Albemarle returned with an improved unsolicited, conditional, and non-binding indicative proposal of $2.50 per Liontown share.
But with Liontown's management labelling the offer opportunistic and believing it undervalues the company's operations, it said no for a third time.
But why are other shares rising?
While Liontown is the lithium share that is an acquisition target, the news has given the whole industry a lift.
This is because Albemarle's offer appears to indicate that it believes lithium shares are severely undervalued and that recent weakness had created a great buying opportunity.
The market is now rerating lithium shares accordingly, much to the dismay of short sellers that have been targeting the industry.
