The world’s largest lithium producer and owner of the huge Greenbushes mine in Western Australia, Albemarle, is now on track to take control of its target, emerging lithium player Liontown Resources after raising its bid for the Australian company.

Having rejected an earlier offer, Liontown now reports it has received a revised $3.00 per share cash offer.

Liontown owns the Kathleen Valley spodumene project near the West Australian town of Leinster.

The new offer is conditional, including the ability to do due diligence on Liontown, the Liontown board recommending the proposed scheme of arrangement, and entry into a mutually acceptable implementation deed.

Albemarle increases offer by 20%

The new offer represents a premium of 14.5% to Liontown’s closing price on Friday.

It is also 20% higher than Albemarle’s previous offer in March of $2.50 per share.

This comes as there have been a number of buyouts of Australian lithium players.

Yet last week in an interview an Albemarle executive declared that only companies with good quality and scale lithium projects need to knock on its door.

Liontown agrees to limited due diligence

Liontown has now announced that it will grant Albemarle an opportunity to conduct limited due diligence on it.

This will enable the global giant to put forward a binding proposal.

“Subject to a mutually acceptable binding scheme implementation agreement, the intention of the Liontown board is to unanimously recommend shareholders vote in favour of the proposal,” the company stated.

This would be in the absence of a superior offer and subject to an independent expert concluding the proposed transaction is in the interests of Liontown shareholders.

Liontown’s chairman, Tim Goyder, is also the company’s largest shareholder.

Albemarle’s Greenbushes mine is a hard rock, open pit mine located 90km southeast of the port of Bunbury, a major bulk-handling port in the southwest of Western Australia.