The Liontown Resources Ltd (ASX: LTR) share price won't be going anywhere on Monday.
That's because the lithium developer has requested a trading halt after dropping a shock announcement.
Image source: Getty Images
What's going on with the Liontown share price?
This morning, the company requested an immediate trading halt after announcing that Albemarle Corp (NYSE: ALB) had withdrawn its takeover proposal.
As a reminder, Albemarle tabled a non-binding offer of $3 per share last month and was undertaking its due diligence.
However, during this period of due diligence, Gina Rinehart's Hancock Prospecting was able to acquire a stake of 19.9% in Liontown. This effectively meant that Rinehart had the power to block any takeover should she wish to.
It appears that this blocking stake is the reason why Albemarle has pulled the pin on the deal. Liontown explains:
Albemarle has advised Liontown that its decision to withdraw its proposal was due to the growing complexities associated with executing the transaction. Albemarle has confirmed to Liontown its favourable view of the flagship Kathleen Valley project and Liontown's management.
What now?
Liontown advised that it remains "committed to delivering on its strategic plan and is confident in its ability to thrive independently." It adds:
The Board of Directors and leadership team maintains an absolute focus on delivering the flagship Kathleen Valley Lithium Project into production, maximising the full potential from Liontown's assets including downstream potential, and, importantly, creating long-term value for all shareholders.
However, it is going to have to source funding for the project now that Albemarle has dropped out. This is why the company has requested a trading halt this morning. Its request states the following:
Liontown considers that the trading halt is necessary to allow for the finalisation of funding associated with the Kathleen Valley Project.
The Liontown share price is expected to be out of action until the commencement of trade on Wednesday.
