The Lithium Power International Ltd (ASX: LPI) share price came flying out of the gates on Thursday before being slammed into a trading halt.
The ASX All Ords lithium stock was up 19% to 42 cents before being paused.
Why is this ASX All Ords lithium stock on fire?
Investors were scrambling to buy the lithium explorer's shares this morning amid reports that a takeover deal is imminent.
According to Bloomberg, Corporación Nacional del Cobre de Chile (Codelco) is close to agreeing to a deal to acquire Lithium Power International for $315 million or 50 cents per share.
Codelco is a Chilean state-owned miner and the world's biggest copper producer.
Last month, the company confirmed that it was in discussions with Codelco regarding a potential transaction and had granted it due diligence access. However, it warned that these discussions were incomplete and no agreement on terms has been reached.
That all appears to have changed, with Bloomberg reporting that sources claim a deal could be announced as soon as next week. However, the same sources have warned that "negotiations could still be delayed or even fall apart."
Is it a good deal?
While the speculated offer is a sizeable 100% premium to where its shares were trading this time last month, longer-term shareholders may feel a little short-changed.
For example, for the majority of the second half of last year, the ASX All Ords lithium stock traded beyond the 50 cents mark.
And before that, in the first half of 2022, it was trading as high as 91 cents at one point. All in all, it could be argued that the potential offer is opportunistic.