Essential Metals (ASX: ESS) shareholders have rejected a A$136 million ($92m) joint takeover bid led by China’s Tianqi Lithium (HKG: 9696) and Australia’s IGO(ASX: IGO).
The outcome was, in part, a result of a dramatic intervention by Mineral Resources' (ASX: MIN) billionaire founder Chris Ellison. His company acquired last week a 19.55% interest in Essential, paying above the 50 Australian cents per share friendly takeover price.
Before Mineral Resource expressed any interest in making an alternative offer, Essential Metals’ shareholders voted down the Tianqi-IGO bid.
Tianqi Lithium Energy Australia (TLEA), the JV owned by Tianqi Lithium (51%) and IGO (49%), was hoping to expand its footprint in the Australian lithium market.
TLEA already has a 51% stake in Greenbushes, the world’s largest hard rock lithium mine, and 100% of the Kwinana lithium refinery.
The acquisition of Essential Metals would have added the early-stage project Pioneer Dome to JV’s portfolio.
The bid required approval from at least 75% of Essential shareholders.
The rejection of the bid leaves Essential’s board in limbo, according to The Australian. The lithium explorer is now unable to talk directly to Mineral Resources as the scheme implementation agreement between the company and TLEA remains in place.
Essential will have to wait until the JV terminates the deal or comes back with an alternative offer.
The Australian miner has until close of business on Friday to try finding a compromise with TLEA, with either party able to terminate the agreement if no deal is reached.