Arcadium shares soar after approving Rio's $10.7 billion takeover
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The news: Arcadium Lithium shareholders have voted in favour of Rio Tinto Group's USD6.7 billion ($10.7 billion) all-cash takeover proposal, bringing it one step closer to completion.
Arcadium shares rose by 8.7% on Tuesday while Rio shares declined 0.55% in response to the news.
The context: The overwhelming approval from investors comes in spite of lawsuits brought by three Arcadium shareholders, alleging the company misled shareholder and failed to maximise value for them. Arcadium rejects these claims.
If Rio is successful in its bid, Arcadium will be its largest acquisition in 17 years. It must now overcome regulatory hurdles in the US, arising from Chinese miner Chinalco's 14.9% ownership stake in Rio. Chinalco is a state-owned enterprise.
Rio Tinto chief executive officer Jakob Stausholm has suggested the dual-listed miner would issue shares to raise the requisite cash.
What they said: “Today’s vote of support by our shareholders confirms our shared belief that with Rio Tinto, we will be a stronger global leader in lithium chemicals production," Arcadium chief executive officer Paul Graves said.
"Together, we enhance our capabilities to successfully develop and operate our assets while supporting the clean energy transition. We are confident that this transaction will provide future benefit to our customers, employees and the communities in which we operate, and I am excited by the path ahead."
The source: ASX
