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Chengdu Tianqi submits C$806 million proposal to acquire Talison Lithium for C$7.15 per share

November 19, 2012

TORONTO, Nov. 19, 2012 /CNW/ – Chengdu Tianqi Industry (Group) Co., Ltd. (“Tianqi”) today announced that its wholly-owned subsidiary Windfield Holdings
Pty Ltd. (“Windfield“) submitted a formal written proposal to the board of Talison Lithium
Limited (“Talison“) under which Windfield would acquire all of the shares in Talison (“Shares“) that it does not already own, at a price of C$7.15 per Share, by way
of a scheme of arrangement (the “Proposal“). The aggregate consideration to be paid to Talison securityholders
under Windfield’s Proposal would be approximately C$806 million.

Windfield is confident that Talison’s board will consider the Proposal
to be a “Superior Proposal” as compared to the scheme of arrangement
involving Rockwood Holdings, Inc. (the “Rockwood Scheme“). The price stated in Windfield’s Proposal of C$7.15 per Share,
reflects a premium of C$0.65 per Share, or 10%, to Rockwood’s current
offer price.

Windfield believes its Proposal will be positive for the management and
staff of Talison as well as providing a premium price for shareholders.
Windfield views the acquisition of Talison as an opportunity to partner
with a strong management team who can successfully grow and add value
to Talison’s existing business, including through continued product
innovation.  Windfield supports Talison’s evaluation of the
construction of a minerals conversion plant in Western Australia to
produce lithium carbonate by 2015 and Tianqi has technical and
marketing expertise that can assist Talison in this regard.

Windfield and Tianqi also intend to open up further markets for
Talison’s product in both Asian and other global markets, including
encouraging producers of lithium chemicals to adopt Australian
spodumene-sourced lithium.  Tianqi notes that analysts such as Byron
Capital Markets have noted that if, by contrast, Rockwood were to
acquire Talison, Rockwood “would become the dominant lithium producer….
[with] a market share of over 50% of the lithium products sold into
various industries”. This could potentially have an adverse impact on
Talison’s existing customers and impede the development of lithium
usage more generally.

Windfield has no current plans to alter the current operations of the
business or change the current management team. Windfield is highly
supportive of the management team, admires their achievements to date
and intend to work closely with them in setting the strategic direction
of the company going forward.

The Proposal includes signed commitment letters to support the funding
required under it, including financing to be sourced from China
Development Bank and an ADM Capital advised lender. Such commitment
letters are subject to certain terms and conditions, including the
entering into of binding facility agreements.

The Proposal is subject to limited, confirmatory due diligence and the
negotiation and entering into of a scheme implementation agreement with
Talison. Windfield believes both of these conditions can be completed
in a relatively short timeframe once Talison’s board engages with
Windfield.

Tianqi has made filings with various regulatory bodies whose approvals
are required in order for Windfield to complete an acquisition of
Talison. At the time of submitting this Proposal, Tianqi has obtained
all the necessary Chinese Government approvals including the approvals
of China’s National Development and Reform Commission (“NDRC“), China’s Ministry of Commerce (“MOFCOM“) and China’s State Administration of Foreign Exchange (“SAFE“). Tianqi is currently not aware of any reason why approvals from the
Australian Treasurer under Australia’s Foreign Acquisitions and
Takeovers Act would not be forthcoming.

At the time of submitting its Proposal, Windfield has acquired, and
agreed to acquire, an aggregate of 18,443,662 Shares, representing
16.14% of the issued and outstanding Shares, calculated on a
non-diluted basis. This is comprised of the 17,143,422 Shares,
representing 14.99% of the issued and outstanding Shares calculated on
a non-diluted basis which were disclosed in the press release and early
warning reports that were issued and filed on November 12, 2012 and a
subsequent agreement that Windfield entered into for the Purchase of an
additional 1,300,240 Shares, representing 1.14% of the issued and
outstanding Shares, calculated on a non-diluted basis, at C$7.10 per
share subject to certain price adjustments and subject to the condition
that Tianqi receives approval from the Australian Treasurer under
Australia’s Foreign Acquisitions and Takeovers Act.

Tianqi believes that the formal proposal put to the Talison Board today
represents a “Superior Proposal” as defined in the Scheme
Implementation Agreement under the Rockwood proposal and has requested
that Talison announce as soon as possible that it intends to postpone
the shareholder meeting currently scheduled in relation to the
lower-priced Rockwood offer whilst due diligence and documentation are
negotiated for schemes of arrangement involving Tianqi.

If for any reason, Talison elects not to engage on Tianqi’s higher offer
then registered shareholders who wish to revoke a proxy or have queries
about how they can vote should contact Computershare on 1-800-564-6253
(toll free in Canada and the United States) or 514-982 7555
(international direct dial) on business days between the hours of 9a.m.
and 5p.m. Eastern Time.  See http://corporate.computershare.com/Canada/OurBusiness/cis/CU/Pages/SecurityholderAccountInquiries.aspx
Beneficial shareholders who wish to change their voting instructions for
the Rockwood Scheme or have queries about how they can vote should
contact their broker.

Neither this release nor the Proposal constitutes a public proposal
under section 631 of the Australian Corporations Act 2001 by Tianqi or
Windfield to make a takeover bid for securities in any company.

Tianqi, via its subsidiary Sichuan Tianqi Lithium Industries, Inc. (“Tianqi Lithium“), is the world’s largest hard rock lithium converter. With over ten
years experience in the research, production and sales of lithium
chemicals, Tianqi Lithium offers a diverse portfolio of products
ranging from carbonate to lithium metals, in order to meet almost all
kinds of raw material demands from battery producers. Tianqi Lithium
holds a significant market share and is one of the most important raw
material providers for the clean energy industry in China.

Tianqi has enjoyed a strong and mutually beneficial relationship with
Talison and its predecessors since 1997.  Tianqi (through subsidiaries)
currently purchases approximately 40% of the chemical grade lithium
concentrate produced by Talison and is the sole distributor in China of
Talison’s technical grade lithium concentrate.

An early warning report will be filed on SEDAR and will be available for
review at www.sedar.com under Talison’s profile.

Tianqi’s financial adviser is RedBridge Grant Samuel, its tax and
accounting adviser is PricewaterhouseCoopers, and its legal advisers
are Linklaters and ZhongLun in China, Allens in Australia and Stikeman Elliott in Canada.

Further Information About Tianqi:

Tianqi is a privately held Chinese company founded in 2003.  Its business activities are primarily conducted through the following
subsidiaries:

        --  Sichuan Tianqi Lithium Industries, Inc.- a Chinese company
            listed on the Shenzhen Stock Exchange, engaged in the
            production of lithium carbonate and other lithium products from
            chemical-grade lithium concentrates sourced from Talison;

        --  Sichuan Tianqi Industry Co., Ltd. - a distributor of technical
            grade lithium concentrates, as the sole distributor for Talison
            in China;

        --  Chengdu Tianqi Machinery - provides spare parts and accessories
            for machinery and electrical equipment used in the
            construction, packing and agriculture sectors; and

        --  Chengdu Sendasun Agricultural Machinery Co., Ltd. - undertakes
            research, development, manufacturing and sales of agricultural
            equipment.

Tianqi and its subsidiaries conduct their operations mainly from China,
but have customers, business partners and suppliers in various
countries around the world, including Europe, Australia, the United
States and Japan.

More information about Tianqi is available from the following website: www.tianqigroup.cn/en/Index/aboutus.html

 

SOURCE Chengdu Tianqi Industry Group Co., Ltd


Source: PR Newswire