It was an eventful month for the Liontown share price in September. Here's what happened

This lithium share roared higher last month despite the market blues.

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Lion holding and screaming into a yellow loudspeaker on a blue background, symbolising an announcement from Liontown.

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The Liontown Resources Ltd (ASX: LTR) share price was on form and thoroughly outperformed the market and peers in September.

During the month, the lithium developer's shares jumped 13.5%.

This compares to a 3.5% decline by the ASX 200 index and 8% and 16% declines by Pilbara Minerals Ltd (ASX: PLS) and Allkem Ltd (ASX: AKE) shares, respectively.

Why did the Liontown share price outperform?

The catalyst for this outperformance was news that lithium giant Albemarle Corporation (NYSE: ALB) tabled a non-binding $3 per share takeover offer. This values the company at $6.6 billion.

While Liontown has not quite accepted this offer yet, it was enough to grant due diligence access to Albemarle. It also revealed that it would be willing to accept a deal at this price if it became binding, subject to an independent expert's report.

Since the offer has been tabled, Gina Rinehart's Hancock Prospecting business has been snapping up as many shares as it can for under $3 per share.

This initially sparked hopes that a bidding war was about to break out between Albemarle and Rinehart. However, it still remains unclear what Hancock Prospecting's true motive is.

But what we do know is that it is a big fan of the company's Kathleen Valley Lithium Project and sees it "as a significant lithium asset."

However, it seems that Hancock Prospecting doesn't rate Liontown's management too highly and appears to want some control over the project's development. It commented:

Hancock can provide Liontown with the opportunity to manage its project execution and operational ramp-up risks where it is of value – and particularly in light of the inflationary market pressures that are creating challenges for project delivery across Australia.

It then added in its most recent update:

Liontown's update to the ASX earlier today reinforces Hancock's previous observations that the project faces significant execution, operational ramp-up and market risks. […] Only last month, Liontown stated that it was proceeding with a Direct Shipping Ore (DSO) product to provide an early source of revenue from the project, describing the economics as compelling. Today, Liontown put DSO on hold indefinitely due to declining lithium prices.

As of today, Rinehart has increased her stake in Liontown to almost 15%.

Time will tell what happens from here. But it's quite likely that this story is only just beginning, so stay tuned for that.

Motley Fool contributor James Mickleboro has positions in Allkem. 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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