Liontown share price jumps 11% on new Albemarle $6.6b takeover offer

This lithium miner has received an improved takeover offer.

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The Liontown Resources Ltd (ASX: LTR) share price is starting the week strongly.

In morning trade, the lithium developer's shares are up 11% to $2.92.

Why is the Liontown share price jumping?

Investors have been scrambling to buy Liontown shares this morning after the company revealed that lithium giant Albemarle Corporation (NYSE: ALB) has returned with an improved takeover offer.

According to the release, Liontown has received a revised conditional and non-binding indicative proposal from Albemarle to acquire all its shares for $3 in cash per share via a scheme of arrangement. This is up from $2.50 per share previously and values Liontown at $6.6 billion.

Albemarle has advised that the revised proposal is its best and final proposal, in the absence of a superior proposal.

The company notes that the proposal is subject to several conditions before it would be binding. This includes due diligence to the satisfaction of Albemarle, the Liontown board unanimously recommending the proposal and entry into a mutually acceptable scheme implementation deed.

Any scheme implementation deed would also be subject to approval of the scheme by Liontown shareholders and regulatory approvals.

Is this acceptable?

It seems that Albemarle has done enough this time to potentially get a deal over the line.

The release notes that Liontown has carefully considered the revised proposal and decided to grant Albemarle an opportunity to conduct a limited period of exclusive due diligence. This is to put it in a position to put forward a binding proposal.

And if a binding proposal at $3 per share is tabled, the Liontown board intends to unanimously recommend shareholders vote in favour of the proposal in the absence of a superior proposal and subject to an independent expert's report.

However, it is worth highlighting that Liontown has warned that there is no certainty that the revised proposal will progress to a binding offer for consideration by shareholders. It intends to keep them and the market fully informed of further developments as appropriate.

The Liontown share price is now up 75% over the last 12 months.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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