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Talison Lithium Ltd. (TLH), an Australian producer of the metal, said it will begin talks with Chengdu Tianqi Industry Group Co. to determine if the Chinese company’s C$806 million ($807 million) takeover bid is superior to Rockwood Holdings Inc. (ROC)’s competing offer.
Talison will consider factors including the funding of Chengdu Tianqi’s C$7.15-a-share bid and its timing, the Perth- based company said in a statement today.
U.S. chemicals producer Rockwood agreed in August to acquire Talison for C$6.50 a share. That’s Rockwood’s best and final offer, the Princeton, New Jersey-based company said yesterday in a statement.
Lithium is used in batteries for iPads, laptop computers and electric cars. Global demand is seen doubling by 2020 as markets for electric vehicles and energy storage expand, according to analysts at Dahlman Rose & Co. Talison, Rockwood, FMC Corp. (FMC) and Chile’s Soc. Quimica & Minera de Chile SA control more than 90 percent of the metal’s production, analysts at Longbow Research said in an August report.
Chengdu Tianqi is also awaiting regulatory approval to purchase additional Talison shares at C$7.15 that will raise its stake to 19.99 percent from 14.99 percent, the company said in a statement today. The company will use all of its shares to vote against Rockwood’s bid, according to the statement.
Talison dropped 3.6 percent to C$6.66 at 12:16 p.m. in Toronto, the most intraday since Aug. 22. Its shareholders are due to vote on Rockwood’s bid on Nov. 29.
Chengdu Tianqi, a closely held company based in Chengdu, Sichuan Province, converts raw lithium into chemicals used in batteries.
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