In eight days, Hancock Prospecting increases its share of Liontown Resources from 10.7% to 14.7% and nears the 15% threshold required to block Albemarle’s offer. 

In just 8 days, Hancock Prospecting (“Hancock”) has increased its share in Liontown Resources (“Liontown”) by a further 4.0%, bringing its total share of the company to 14.7%. This represents an investment of A$260.0M (US$165.5M) by Hancock. The company is speculated to be increasing its stake with the aim of reaching the 15% threshold, which would allow it to block Albemarle’s offer of A$6.6Bn (US$4.3Bn) to purchase all outstanding shares in Liontown.

Liontown Resources is developing the Kathleen Valley and Buldania lithium projects in Western Australia. Within recent months, there have been several significant investments and aggregations in the lithium sector as concern over supply sources to meet anticipated demand growth continues to permeate the industry.

This latest move by Hancock makes it likely that the company will achieve the 15% shareholder threshold needed to block Albemarle’s acquisition offer for Liontown Resources. As examined in a previous Project Blue article, the discussion now turns to whether Albemarle increase their total offer or decides to enter into partnership discussions with Hancock to develop Liontown’s lithium projects. While Albemarle has the opportunity to increase its offer to buy Liontown outright, it has also entered into joint ventures and partnerships on lithium projects before, including in Western Australia. Given Albemarle’s requirement to secure supplies of lithium feedstocks for its downstream refineries a joint venture or partnership with Hancock seems a more likely scenario, however on the condition that Albemarle secures the feedstock it needs to feed its refining facilities.