Talison Lithium gets Australian Fed nod for C$848m takeover by Tianqi

12th March 2013 By: Henry Lazenby - Creamer Media Deputy Editor: North America

TORONTO (miningweekly.com) – Australian hard-rock lithium miner Talison Lithium on Tuesday said it had received Australian federal approval to proceed with a C$848-million takeover deal by Chinese firm Chengdu Tianqi Industry Group.

The company said the Federal Court of Australia, in Perth, had approved the Tianqi scheme implementation agreement, which would see the C$7.50-a-share deal close on March 26.

Talison said Tianqi's proposed funding arrangements remained subject to certain conditions precedent to drawdown, which Tianqi had confirmed were expected to be satisfied before the due deadline for Tianqi's payment on March 25.

Tianqi and its Australian subsidiary Windfield Holdings had recently entered into financing agreements with a subsidiary of China Investment Corporation (CIC), Leader Investment, for about C$300-million of long-term equity, in exchange for a 35%, noncontrolling equity interest in Windfield.

CIC had also received formal approval from Australia's Foreign Investment Review Board registering no objections to CIC’s investment, through Leader, in Windfield.

Tianqi, and one of its wholly owned subsidiaries, had also entered into loan agreements for $200-million from Credit Suisse, $120-million from the Industrial and Commercial Bank of China and $50-million from Twenty Two Dragons, a company owned by ADM Capital.

Tianqi currently held about 19.9% of the issued share capital of Talison, and, together with the $25-million deposit paid by Tianqi, the arranged funds were deemed enough to buy the remaining 80% of Talison’s shares and options under the Tianqi schemes.

Talison early in December terminated the takeover agreement it had entered into in August with chemicals producer Rockwood Holdings, after it decided to accept a better offer from Tianqi.

Rockwood’s C$724-million offer to buy Talison for C$6.50 a share was below Tianqi’s improved C$847-million offer of C$7.50 a share, at that time.

Talison operates the Greenbushes lithium mine, in Western Australia, and owns the Salares 7 lithium brine project, in northern Chile. It said it produced more than 350 000 t of lithium product in 2011 and had been producing lithium for more than 25 years.

Talison’s shares were expected to cease trading on the TSX on Wednesday.

Talison’s shares changed hands at C$7.47 apiece on Tuesday afternoon on the TSX.