Why did Atlantic Lithium reject Non-Binding Offers from Assore?
In a recent announcement, Atlantic Lithium Limited, an African-focused lithium exploration and development company, revealed the rejection of non-binding indicative offers (NBIOs) from its major shareholder, Assore International Holdings Limited. The offers sought to acquire all the shares in Atlantic Lithium that Assore does not already own. The company's independent board committee, established to consider the approach from Assore, carefully evaluated the offers and determined that they undervalued Atlantic Lithium and were not in the best interests of shareholders.
Background on the Offers
Assore initially presented an identical NBIO on 2 October 2023, offering £0. 33 per share (A$0. 63). This prior offer was similarly rejected by Atlantic Lithium's independent board committee.
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The more recent NBIO on 7 November 2023 included the same offer price. Shareholders of Atlantic Lithium are not required to take any action in response to these offers.
Rejection Based on Shareholder Interests
The independent board committee, along with its advisors, thoroughly analyzed both the NBIO and the prior NBIO, concluding that they undervalued Atlantic Lithium. In light of the company's near-term producer status, the pending investment from the Minerals Income Investment Fund, and the positive outlook for lithium project developers, it was determined that the offers were not in the best interests of shareholders.
Conditions of the Rejected Offers
Both the NBIO and the prior NBIO were contingent on several conditions before becoming binding. These conditions included unanimous recommendation of the offer by the Atlantic Lithium board, satisfactory exclusive due diligence for Assore, Foreign Investment Review Board approval, and the establishment of a definitive and mutually acceptable scheme implementation agreement.
Market Cleansing and Relationship with Assore
As part of its efforts to cleanse the market ahead of potential equity interest issuance to the Minerals Income Investment Fund and other equity issues related to existing employee performance plans, Atlantic Lithium made this announcement to provide transparency about the rejected offers. The company clarified that its relationship with Assore remains supportive and constructive.
As Atlantic Lithium continues to focus on delivering Ghana's first lithium mine, the rejection of the non-binding offers reaffirms the commitment to ensure value for shareholders and align strategies with the company's near-term goals.
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