PERTH (miningweekly.com) – The shareholders of ASX-listed Essential Metals have rejected a A$136-million takeover offer from lithium joint venture (JV) Tianqi Lithium Energy Australia (TLEA).

The JV between battery minerals producer IGO and Tianqi Lithium Corporation, offered Essential shareholders 50c a share in cash for their interest in the company.

While the Essential board had recommended that shareholders vote in favour of the transaction, with an independent expert also stating that the scheme was fair and reasonable, having priced Essential’s shares as being worth between 28.3c and 46.8c a share, some 75% of the votes cast on Thursday were against the transaction.

“The Essential board respects the wishes of the shareholders who voted against the scheme and will now engage with TLEA to determine the next steps in accordance with the scheme implementation agreement (SIA),” said Essential chairperson Craig McGown.

Essential said on Thursday that the company would now present TLEA with a consultation notice given the non-fulfilment of the shareholder approval condition under the offer, and the two companies would consult to determine whether, amongst other things, the transaction may proceed by way of alternative means so as to achieve an outcome that was commercially and substantially the same as the scheme and no less favourable to Essential shareholders.

If Essential and TLEA are unable to reach agreement by April 21, either party could terminate the SIA without a break fee being payable.

“The company will provide a more fulsome update on its forward plans for the Pioneer Dome lithium project in due course, noting that whilst the SIA remains in place, the company cannot engage with potential strategic offtake partners and with Mineral Resources Limited, which recently acquired a 19.55% stake in the company,” said McGown.

“Pioneer Dome is a strategic asset and one of the few independently owned undeveloped lithium deposits in Australia. Following the recently completed scoping study, Essential believes that it remains in a strong position to unlock the value of this asset for its shareholders.”