Chengdu Tianqi submits C$806 million proposal to acquire Talison Lithium for
C$7.15 per share
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
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
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
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
Beneficial shareholders who wish to change their voting instructions for the
Rockwood Scheme or have queries about how they can vote should contact their
Neither this release nor the Proposal constitutes a public proposal under
section631 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
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
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
-- 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
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:
Australia Greg Baxter, Kreab Gavin Anderson +61 2 9552 4499 +61 419 461 368
GBaxter@kreabgavinanderson.com Canada Joshua Goldman-Brown, Kreab Gavin
Anderson +1 646 490 2767 email@example.com
SOURCE: Chengdu Tianqi Industry Group Co., Ltd
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-0- Nov/19/2012 14:00 GMT
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