Liontown shares lower on Albemarle takeover update

What's the latest on this lithium developer's takeover?

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Liontown Resources Ltd (ASX: LTR) shares are opening the week lower.

In morning trade, the lithium developer's shares are down 1% to $3.02.

What's happening with Liontown shares today?

This morning, Liontown released an update on its $3 per share non-binding takeover offer from Albemarle Corporation (NYSE: ALB).

The company highlights that last week its board decided to grant Albemarle an opportunity to conduct due diligence to hopefully allow the lithium giant to put forward a binding proposal. This due diligence was subject to the parties agreeing to a mutually acceptable non-disclosure and exclusivity agreement.

According to today's release, Liontown and Albemarle have now agreed on the terms of that non-disclosure and exclusivity agreement, and Albemarle is expected to commence its due diligence shortly. Management advised that it expects Albemarle's due diligence to take approximately four weeks.

It's exclusive

As mentioned above, this due diligence will be on an exclusive basis, with Liontown agreeing to "no-shop" and "no-talk" clauses. However, it is subject to customary fiduciary exceptions. This includes Liontown being allowed to respond to and grant due diligence in respect of an unsolicited third-party competing proposal that could be expected to lead to a superior proposal.

Given how a third party appears to have been buying Liontown shares on-market since Albemarle tabled its offer, don't bet against a counter-offer being made. Though, as things stand, we still don't know who was doing the buying.

The Liontown board intends to keep shareholders and the market fully informed of further developments as appropriate. At this point, it advised that its shareholders do not need to take any action.

These are interesting times for Liontown and its shareholders.

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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