* China's Tianqi gets Australian approval for 100 pct
* Talison shares close up 2.8 percent at C$6.97 on TSX
(Adds analyst's quote)
By Julie Gordon
TORONTO, Nov 23 Talison Lithium Ltd
said on Friday its Chinese suitor, Chengdu Tianqi Industry Group
Co, has secured Australian regulatory approval for its proposed
takeover of Talison, sending shares of the lithium producer up
more than 2 percent.
The nod from Australian regulators comes just two days after
rival suitor Rockwood Holdings Inc said it was not
interested in a bidding war. Talison adjourned a meeting to vote
on Rockwood's offer until Dec. 13.
Perth, Australia-based, Toronto-listed Talison said it was
continuing talks with China's Tianqi on its C$7.15-a-share
offer, which values the company at C$806 million ($807.57
That offer is 65 Canadian cents higher than U.S.-based
chemical producer Rockwood's C$6.50 per share bid, which values
Talison at C$724 million and was approved by Australian
regulators earlier this week.
Talison's board will now need to determine if the Chinese
offer is a "superior proposal" to its friendly deal with
Rockwood, taking into account the monetary value of the offer,
the likelihood of conditions being attached, and the timing
required to complete a deal.
With a far higher bid price and no objections from
Australia's Foreign Investment Review Board (FIRB), things are
looking positive for Tianqi, said Jonathan Lee, an analyst at
Byron Capital Markets.
"We thought the biggest hurdle was going to be the FIRB
approval, so to some extent that approval has greatly increased
the chance of the Talison board accepting Tianqi's offer," he
Tianqi holds a 15 percent stake in Talison and now that the
foreign investment hurdles have been cleared, it will settle on
an extra 5.7 million shares, boosting its stake to 20 percent.
Shares of Talison rose 19 Canadian cents to close at C$6.97
on Friday on the Toronto Stock Exchange, but the stock remained
below the Chinese company's offer.
"It could be that people still think there is some risk in
the story," said Lee, noting that a Tianqi takeover could take
three to six months to close, making timing an issue.
Any takeover of Talison will also face a review by
Investment Canada, though the deal is unlikely to be opposed as
the company does not have mining assets inside Canada.
Talison is the world's largest pure-play lithium producer.
The miner 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 also
owns a development-stage project in northern Chile.
(Reporting by Julie Gordon in Toronto and Ankur Banerjee in
Bangalore; Editing by Don Sebastian,; Gerald E. McCormick and;