Remember our neighbours? Lithium One, Nemaska ( Tianqi as a backer and offtake) and now CLQ being in production w/offtakes in place...
We have to be next in line yes...?
March 30, 2012 12:50 ET
Lithium One Announces Merger With Galaxy Resources Limited Valued at Approximately C$112 Million
VANCOUVER, CANADA--(Marketwire - March 30, 2012) -
NOT FOR DISSEMINATION IN THE UNITED STATES
Lithium One Inc. (the "Company" or "Lithium One") (TSX VENTURE:LI) is pleased to announce that Lithium One and Galaxy Resources Limited (ASX:GXY) of Australia ("Galaxy") have entered into a definitive arrangement agreement (the "Agreement") pursuant to which a wholly owned subsidiary of Galaxy will acquire by way of a court-approved plan of arrangement (the "Arrangement") all of the outstanding securities of Lithium One.
Holders ("Shareholders") of common shares of Lithium One (the "Common Shares") will be entitled to receive the greater of (a) 1.80 ordinary shares of Galaxy (the "Galaxy Shares") or (b) the number of Galaxy Shares determined by dividing C$1.55 by the Canadian dollar equivalent of the offering price per Galaxy Share under Galaxy's public offering to be conducted immediately following the public announcement of the Arrangement (the "Offering"), in exchange for each issued and outstanding Common Share. Certain eligible Shareholders may elect to receive all or a part of their consideration in the form of exchangeable shares ("Exchangeable Shares") of a Canadian subsidiary ("Canco") of Galaxy in place of the Galaxy Shares, to allow such Shareholders to potentially benefit from a deferral of capital gains tax consequences, pursuant to the terms of the Arrangement Agreement.
The implied value of the share consideration is C$1.55 per Lithium One share (based on the 5 day volume weighted average trading price ("VWAP") of Galaxy Shares on the Australian Stock Exchange up to and including 15 March, 2012 when Galaxy's non-binding indicative proposal was submitted to Lithium One) representing a 40% premium to Lithium One's 5 day VWAP on the TSX Venture Exchange (the "TSX-V") up to and including March 14, 2012. The offer values Lithium One at approximately C$112 million on an undiluted basis as at 15 March 2012. Based on the 20 day VWAP as at March 29, 2012 for Galaxy and Lithium One of A$0.885 and C$1.29 respectively and a C$:A$ exchange rate of 0.965, the offer represents a premium to Lithium Shareholders of 40%.
With respect to other securities of Lithium One, holders ("Optionholders") of options to acquire Common Shares ("Options") that are "in the money" will be entitled to receive, in respect of each Option, Galaxy Shares in accordance with an exchange ratio as set out in the Agreement and holders ("Noteholders") of convertible notes of the Company ("Notes") would receive a Galaxy convertible note in exchange for each issued and outstanding Note.
Galaxy is immediately undertaking an equity financing to strengthen the merged entity balance sheet and provide financial flexibility with its development plans. Galaxy has indicated that its intention is to undertake an equity raising of A$50 million with provision for oversubscriptions based on demand. If the final Canadian dollar equivalent issue price per ordinary share for the Galaxy financing results in an implied value to Lithium One shareholders of less than C$1.55, the Galaxy Shares consideration will be adjusted from 1.80 to the number of Galaxy Shares resulting from dividing C$1.55 by the Canadian dollar equivalent of the issue price per Galaxy ordinary share.