On September 28, Lithium Power International (ASX:LPI) confirmed in a statement to the ASX that it had been in discussions with Chilean state-owned copper giant, Codelco, about a potential ‘transaction.’
The shares had already risen from just over 22 cents a week earlier on rumors of a deal of some sort. They closed at 26 cents on September 26. The next day, they went into a trading halt, and on the 28th, they surged to 36 cents when the Codelco talks were confirmed.
The story died, but overnight Wednesday, Bloomberg reported that the two companies were approaching a deal at around 50 cents a share.
This would value LPI at around $A315 million, compared to the current value of around $140 million.
“The Chilean state-owned firm is in advanced discussions to buy out Lithium Power at about 50 Australian cents per share, representing a 43% premium to its Wednesday closing price,” Bloomberg reported. “The companies are working on finalizing a deal,” they said.
Lithium Power has projects in Chile and Australia. Its Maricunga project, located within the so-called lithium triangle in northern Chile, is estimated to contain about 1.9 million tons of lithium carbonate equivalent (meaning it is a brine-based prospect). The firm’s projects in Western Australia are still in the exploration stage.
Shares of Lithium Power have fallen about 20% this year, giving it a market value of around $141 million.