Some pissed off share holdersssssssssssss
Investors sue USlithium miner over Rio Tinto’s $6.7b takeover
Three disgruntled shareholders in a New York-listed lithiumminer being sold to Rio Tinto have sued the US company and its board, accusingthem of negligently leaving money on the table in the $US6.7 billion ($9.9billion) deal.
The lawsuits – filed in four separate US courts – allegeArcadium Lithium’s directors misled shareholders and failed in their fiduciaryduty to maximise value, according to market filings.
Rio Tinto, which views the miner as key to securing lithium forits green-energy ambitions in Argentina’s “lithium triangle”, has not been named as a defendant.
Arcadium said it whollyrejected the complaints, and believed no additional disclosure was legallyrequired. But the board said it chose to address the claims in a statement tothe US Securities and Exchange Commission to prevent delays and minimise litigationrisks ahead of an investor vote to approve the takeover set for December 23.
The legal action is at oddswith other investors who have declared their support for the deal; two giant USinvestment managers – Calvert and California State Teachers’ Retirement System(CalSTERS) have said they would vote in favour.
Support for the transaction iswarranted, given that the offered consideration represents a triple-digitpercentage point premium to the unaffected price,” wrote Calvert, “and the cashform of consideration provides certainty and liquidity to Arcadium shareholders.”
Rio Tinto’s offer to buy Arcadium in mid-October was pitched ata 90 per cent premium to Arcadium’s market value two days prior, but was belowthe $US10.6 billion valuation the company commanded in May last year when its predecessors Livent and Australia’s Allkem merged.
That deal was sealed as lithium prices were sinking but beforethe crash at the end of last year. Arcadium was officially created in Januarywhen shareholders signed off on the Livent and Allkem transaction.
The identity of the complainants who have filed cases in the NewYork Supreme Court, one in Suffolk County and two in New York County, and thesize of their shareholdings, were not disclosed.
The deal will require the support of at least 75 per cent ofArcadium shareholders.
The Rio-Arcadium transaction marks the third time in just overthree years that Argentina’s Olaroz lithium brine asset has been at the heartof merger and acquisition activity.
Founded and developed by former ASX company Orocobre, it wasmerged with ASX-listed Galaxy Resources in 2021 to form Allkem.
Buying Arcadium would give Rio control of about 5 per cent ofthe world’s lithium supply, and is at odds with BHP and Glencore’s belief that lithium will not be a lucrative industry because of its abundant supply.
Despite a 90 per cent slump in lithium prices over the past 18months, Rio has expressed faith in the long-term demand for the green metal,which is coveted by manufacturers of modern batteries for industrial uses andelectric cars.
Last week Rio pulled the trigger to develop its firstlarge-scale brine project in Rincon in Argentina’s lithium triangle with a$US2.5 billion investment.
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