Liontown backs takeover bid by lithium giant Albemarle

Lithium developer Liontown Resources says its board plans to recommend a sweetened $6.6 billion takeover offer from the world's largest lithium miner, if Albemarle makes it binding.

Liontown said on Monday it would open its books to Albemarle to enable the US company an opportunity to conduct due diligence with a goal of making a binding offer.

North Carolina-based Albemarle, whose assets include a $2 billion lithium hydroxide processing plant opened last year in Kemerton, WA, has tentatively offered $3 per share, up from its $2.50 per overture in late March.

Albemarle has told Liontown's board this offer is its best and final proposal, in the absence of a superior offer.

"The Revised Proposal delivers an immediate premium for Liontown investors and is expected to drive significant value creation for Albemarle shareholders," Albemarle said.

One of Australia's highest profile lithium companies, Liontown is working on bringing into production one of the world's largest and highest-grade hard rock lithium deposits in the world, with deals inked with Tesla and Ford Motor Co to supply an essential component for their electric vehicles.

Liontown's Kathleen Valley Lithium Project, located 680km northeast of Perth in WA, is on track to open in the middle of next year, and is being financed by Ford.

Liontown is also set to joint the ASX100 index on September 18, replacing Harvey Norman, S&P Dow Jones announced late Friday as part of its regular quarterly rebalancing.

Liontown shares were up 9.2 per cent to $2.86 shortly before lunchtime on Monday, up from $1.32 at the start of the year.

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