Tianqi Lithium Energy Australia Pty Ltd (TLEA) proposes to acquire 100% of Essential Metals Limited (Essential) (ASX: ESS) by way of a Scheme of Arrangement (Scheme) detailed in a binding Scheme Implementation Agreement (SIA) signed by TLEA and Essential
TLEA is an incorporated joint venture owned 51% by Tianqi Lithium Corporation, a global energy materials company listed on the Shenzhen and Hong Kong Stock Exchanges currently capitalised at ~US$19 billion, and 49% by IGO Limited (ASX: IGO), a mining and processing company which produces metals critical for clean energy and currently capitalised at ~A$10.5 billion. TLEA owns an integrated lithium business, including a 51% interest in the Greenbushes Lithium Operation (Albemarle Corp, 49%) and 100% of the Kwinana Lithium Hydroxide Refinery, both located in Western Australia
The Scheme Consideration is A$0.50 in cash per ESS share, implying a fully diluted equity value for Essential of ~A$136 million
The Scheme Consideration represents a significant premium of:
o 44.9% to the closing Essential share price of A$0.345 per share on 6 January 2023
o 45.7% to the 1-month Essential VWAP of A$0.343 per share up to and including 6 January 2023
The Scheme is unanimously recommended by the Essential Board of Directors in the absence of a superior proposal and subject to the independent expert opining that the Scheme is in the best interests of Essential shareholders
The SIA contains various standard "no shop", "no talk", "notification" and "matching rights" provisions, with a break fee payable in certain circumstances
The Scheme is subject to various conditions including
TRANSACTION SUMMARY
Essential Metals Limited (Essential) (ASX: ESS) (the Target) and Tianqi Lithium Energy Australia Pty Ltd (TLEA) (the Bidder) are pleased to announce the execution of a binding Scheme Implementation Agreement (SIA) for the implementation of a Scheme of Arrangement (Scheme) under which TLEA will acquire 100% of the issued capital of Essential. If the Scheme is implemented, each Essential shareholder on the Record Date will receive a cash amount of A$0.50 per Essential