* Friendly takeover by Rockwood approved by regulators
* Talison says to engage Tianqi on C$806 mln rival bid
* Talison shares fall 7 percent to C$6.62 on TSX
By Julie Gordon
TORONTO, Nov 21 Shares of Talison Lithium Ltd
dropped more than 7 percent on Wednesday after suitor
Rockwood Holdings Inc said it was not interested in a bidding
war, even as Talison indicated it plans to open talks with a
Rockwood, a U.S.-based chemical producer, said late
on Tuesday that Australian authorities had approved its C$724
million ($725.71 million) takeover of Perth-based,
"With this approval, Rockwood has obtained all regulatory
approvals," Chief Executive Seifi Ghasemi said in a statement.
"Rockwood has no intention of engaging in a bidding process for
the acquisition of Talison."
Talison recently completed an expansion at its flagship
project in Australia and now has the capacity to produce nearly
two-thirds of current global demand for lithium carbonate, which
is used in smartphone and hybrid car batteries.
The company said on Wednesday that it would hold talks with
Chengdu Tianqi Industry Group Co to determine if the Chinese
company's C$7.15-a-share offer, which values Talison at C$806
million, represents a "superior proposal" to the Rockwood deal.
A "superior proposal" takes into account the monetary value
of the offer, the likelihood of conditions being attached to a
takeover, and the timing required to complete a deal, Talison
Talison's board continues to back the Rockwood deal.
Shares of the lithium producer climbed as high as C$7.25
after Tianqi's bid was made official earlier this week. The
stock fell to C$6.62 on Wednesday afternoon, well below the
Tianqi offer price, but above the C$6.50-a-share Rockwood offer.
Shares of Talison have risen more than 56 percent since Aug.
21, the day before the Rockwood deal was announced, and are up
more than 92 percent this year on the Toronto Stock Exchange.
Closely held Tianqi said on Wednesday that it had made
offers for more Talison shares, potentially boosting its stake
in the lithium miner to 20 percent, conditional on regulator
Talison has a unique position as an established, pure-play
lithium producer with operations in Australia and a strong
customer base in Asia, making it an attractive target.
The lithium market has grown in recent years on rising
demand for lithium batteries, which fuel smartphones, tablet
computers and other portable electronics, along with hybrid and
Tianqi is the world's largest hard rock lithium converter
and makes various raw materials for the battery industry. The
Chinese company is a long time Talison customer.
New Jersey-based Rockwood has said a takeover of Talison
will allow it to expand into Asia and boost its lithium output
to meet rising demand from the battery market.
Lazard Ltd is advising Rockwood while Talison is advised by
Macquarie Capital in Australia and Canada. Tianqi's financial
adviser is RedBridge Grant Samuel.