Chilean state-run mining company Codelco has signed a binding scheme implementation deed to take over Australia’s Lithium Power International (LPI), valuing the latter at A$385m ($244m).

LPI shareholders have been offered A$0.57 for each share held, representing a 119% premium to the stock close on 26 September.

This offer also marks a 136% premium to LPI’s undisturbed 30-day volume weighted average price (VWAP) of A$0.24 a share.

The LPI board has unanimously recommended its shareholders to vote for the proposal, provided there is no better offer and subject to an independent expert conceding that the offer is in the shareholders’ best interests.

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By GlobalData

Minera Salar Blanco, a shareholder owning a 28.25% stake in LPI, has agreed to vote in favour of the proposal.

This will mark Codelco’s first lithium property acquisition, and is in accordance with the National Lithium Strategy announced in April this year.

LPI holds the Maricunga lithium project, also known as Proyecto Blanco, located next to Codelco’s mining properties in the Maricunga Salar.

Codelco is poised to leverage its experience in mining and financial strength to maximise the value of LPI’s lithium project. Its knowledge across the Atacama region is expected to help in reducing risks during the development stages.

A shareholder vote on the takeover proposal is scheduled for January next year. The scheme also awaits clearances from the court and Foreign Investment Review Board. 

Codelco board of directors president Máximo Pacheco said: “The acquisition of LPI is a logical consolidation within the lithium landscape of the Salar de Maricunga and further positions us in our strategy to become a supplier of critical metals of global relevance to enable the energy transition and comply with the National Lithium Strategy.”

LPI CEO and managing director Cristobal Garcia-Huidobro said: “We believe this transaction is a great outcome for LPI shareholders and for other stakeholders including employees, suppliers and the people of Chile, all of whom will benefit from the Maricunga Lithium Project being developed by a large, well-financed and experienced mine developer and producer as Codelco.”