By Adria Calatayud
Shares in Bacanora Lithium PLC rose Wednesday after Ganfeng Lithium Co. said the companies have reached an agreement on the terms of a formal takeover offer that values Bacanora at 284.8 million pounds ($391 million), after including a distribution of Zinnwald Lithium PLC shares.
Ganfeng increased its offer to 73.6 pence a Bacanora share in cash and Zinnwald shares, which compares with its previous offer of 67.5 pence a share in cash, Ganfeng and Bacanora said. Under the offer, shareholders in the U.K. lithium-mining company will be entitled to receive 67.5 pence in cash and a distribution of Bacanora's stake in Zinnwald at a ratio of 0.23589 Zinnwald shares for each Bacanora share.
Shares in Bacanora at 1448 GMT were up 17% at 65.75 pence, while Zinnwald shares fell 5.8% to 24.25 pence.
Ganfeng and Bacanora in May said that they entered into a deal regarding the terms of a possible all-cash offer of 67.5 pence a share by Ganfeng--Bacanora's largest shareholder with a 28.9% stake--but that a formal offer was subject to certain preconditions. The final outstanding precondition has now been satisfied, the companies said.
The offer will be conditional upon approval from Bacanora shareholders and regulatory clearance, the companies said. Ganfeng has informed Bacanora that it has submitted documentation to seek Mexican antitrust clearance.
Bacanora's independent directors intend to recommend unanimously that shareholders accept the offer. Ganfeng has received commitments to accept the offer from the M&G Recovery Fund, which controls around 13.7% of Bacanora's issued ordinary share capital.
Ganfeng first invested in Bacanora in 2019 and currently owns 50% of the Sonora lithium project in Mexico, operated by Bacanora.
Write to Adria Calatayud at adria.calatayud@dowjones.com