Large Liontown share trade fuels talk of rival bid, fingers point to Gina Rinehart

Is Gina Rinehart behind the sudden buy up of large tranches of Liontown shares? Picture: Quinn Rooney/Getty Images

An unusual amount of share trading in takeover target Liontown on Thursday through Euroz Hartleys had the market talking about whether a rival buyer could be lurking.

Sources on Thursday were pointing to mining billionaire Gina Rinehart as the buyer of the shares, although this was not confirmed.

However, the shares were purchased through Euroz Hartleys, the broker that has been previously used by Mrs Rinehart’s company Hancock Prospecting.

It is understood that in Thursday’s trade, there were 87 million shares traded in Liontown compared to 7.8m daily trading across the three-month average.

It represents about 1.7 per cent of the company’s stock and was traded in five blocks at $3 per share.

Shares in Liontown on Thursday closed up 9 per cent to $3.02, with its market value at $6.1bn.

The stock hit an intraday high of $3.03, the highest level since June 16.

Shares had closed on Wednesday at $2.77 and opened on Thursday at $2.80.

Mrs Rinehart has a keen focus on the lithium space and has been emerging on the register of a number of companies, including Delta Lithium and Patriot Battery Metals.

She also has the financial firepower to take on Albemarle with a rival bid.

However, the play may just be to create a blocking stake so that she has a seat at the negotiating table.

It comes just days after Liontown granted the world’s largest lithium producer Albemarle due diligence following a sweetened $6.6bn buyout proposal for the company.

The latest play was further evidence the land grab is on among the world’s largest lithium producers, as Albemarle’s South American rival SQM has also recently bid for the $1.2bn lithium producer Azure Minerals.

Mrs Rinehart’s interests already hold a 4.97 per cent share Liontown, market sources say.

As reported on Monday, Barrenjoey and JPMorgan were advising Albemarle on its $3 per share offer, while Albemarle is working with UBS and Greenhill.

Before the proposal came to light, Liontown’s shares closed on Friday at $2.62.

Other local lithium producers looking to consolidate in the space are Chris Ellison’s Mineral Resources and Pilbara Minerals, as well as Hancock Prospecting.

MinRes has just been confirmed as the preferred bidder to take the Bald Hill lithium project out of administration, as well as holding shares in Delta Lithium, Essential Metals and Global Lithium.

Based in Perth, Liontown controls two major lithium deposits in Western Australia – its major project Kathleen Valley in the northern goldfields and Buldania in the eastern goldfields.

The company is 15 per cent owned by chairman Tim Goyder.

Earlier this year, it rebuffed a $2.50-a-share proposal to buy the company from Albemarle, taking its value to $5.5bn.

This came after a number of earlier attempts by Albemarle to buy the business at lower bids, offering $2.20 per share on October 20 then $2.35 on March 3.

Before Albemarle’s interest was known, Liontown traded at $1.53.

Given the challenges of delivering such a highly complicated project, many have taken the view that a lofty offer from one of the world’s major producers should be taken seriously.

Liontown’s market value has moved from about $200m three years ago to become a business valued at $3.4bn before the Albemarle offer emerged, as it has capitalised on more certainty around Kathleen Valley and the surging lithium commodity price.

On its website, Liontown says 145 million electric vehicles will have taken to the road by 2030 and that it is producing the resources needed to power the vehicles.

Liontown’s Kathleen Valley project will be one of the world’s largest lithium mines, supplying 500,000 tonnes of 6 per cent lithium oxide concentrate per year when it comes on stream in 2024.

Final investment decision approval was given by the board in June last year after signing offtake agreements with Tesla, Ford and LG Energy Solution.