Talison Lithium calls off agreement with Rockwood

(Reuters) - Talison Lithium Ltd TLH.TO said it will terminate buyout talks with U.S.-based chemical producer Rockwood Holdings Inc (ROC.N), a week after the lithium producer backed a sweetened takeover bid from China's Chengdu Tianqi Industry Group Co.

Rockwood had offered to buy Talison for C$6.50 per share, below Tianqi's revised offer of C$7.50 each. The Rockwood offer valued Talison at C$724 million, while Tianqi's offer values the miner at C$847 million.

Talison's board last week recommended that shareholders accept the Tianqi offer in the absence of a new bid from Rockwood.

Rockwood said in November that it was not interested in a bidding war.

Talison said on Wednesday it will pay Rockwood a C$7 million break fee.

Shares of Perth-based Talison, which is valued by the market at C$812 million, closed at C$7.33 on the Toronto Stock Exchange on Tuesday.

(Reporting by Bhaswati Mukhopadhyay in Bangalore)