Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) ("Lithium
Americas" or the "Company") is pleased to announce that it
has submitted an unconditional offer to Millennial Lithium Corp.
(“
Millennial”) to acquire all of the outstanding
shares (each, a “
Common Share”) of Millennial (the
“
Offer”). Under the terms of the Offer, on
closing, each Millennial shareholder (“
Millennial
Shareholder”) will receive C$4.70 per Common Share,
payable in Lithium Americas common shares and C$0.001 in cash per
Common Share (the “
Purchase Price”), representing
total consideration of approximately US$400 million. Based on the
Company’s closing price on October 29, 2021, this consideration
would result in Millennial Shareholders owning approximately 9.9%
of Lithium Americas.
“In proximity to
Caucharí-Olaroz, Millennial’s 100%-owned Pastos Grandes lithium
brine project represents an attractive regional growth opportunity
for Lithium Americas,” said Jonathan Evans, President and CEO. “As
we bring Caucharí-Olaroz into production over the next year and
continue to advance our Stage 2 expansion planning, the addition of
this highly complementary lithium brine resource further enhances
our long-term growth strategy in Argentina and leverages our
technical and development expertise.”
The board of directors
of Millennial (the “Millennial Board”), after
consultation with Millennial’s financial and legal advisors, and
after considering a recommendation from the Special Committee of
the Millennial Board, has unanimously determined that the Offer
constitutes a “Superior Proposal” in accordance with the terms of
the arrangement agreement between Millennial and Contemporary
Amperex Technology Co., Ltd. (“CATL”) dated
September 28, 2021, as assigned and amended on October 12, 2021
(the “CATL Agreement”).
In accordance with the
CATL Agreement, Millennial has notified CATL that it considers the
Offer to be a Superior Proposal and that the ten business day
matching period (the “Matching Period”) has
commenced, during which CATL has the right, but not the obligation,
to propose to amend the terms of the CATL Agreement in order for
the Offer to cease to be a Superior Proposal (the “Match
Right”). The Matching Period expires at 4:30 p.m. (Pacific
Time) on November 16, 2021.
Benefits to
Millennial Shareholders
- Purchase
Price provides premium over CATL Agreement
- Purchase Price
of C$4.70 per Common Share payable in Lithium Americas common
shares (based on a floating exchange ratio / fixed value per share)
and C$0.001 in cash per Common Share represents a premium of C$0.85
(22.1%) per Common Share to the CATL Agreement and C$1.01 (27.4%)
per Common Share to Millennial’s closing price as of October 29,
2021.
- Offer
not subject to financing conditions or regulatory review
- Lithium
Americas’ shares trade on both the TSX and NYSE and are highly
liquid providing Millennial Shareholders with the optionality to
either crystalize value today or participate in potential future
upside in the combined entity.
- Option
for a potential tax-deferred rollover for certain
shareholders
- Stock
consideration allows flexibility from a tax planning perspective
for certain Millennial Shareholders.
Benefits to
Lithium Americas Shareholders
-
Attractive regional growth opportunity in proximity to
Caucharí-Olaroz
- Millennial’s
Pastos Grandes lithium brine project in Salta province, Argentina,
is approximately 100 km from Caucharí-Olaroz. In 2019, Millennial
prepared a feasibility study that supports production of 24,000
tonnes per annum of battery-quality lithium carbonate for 40 years,
with an initial capital cost of US$448 million and operating cost
of US$3,388/tonne.
- Bolsters
Lithium Americas’ growth pipeline while preserving cash on
hand
- The addition of
a complementary and advanced stage resource significantly expands
Lithium Americas’ growth pipeline in Argentina, without distracting
management from existing operations. The primarily stock
acquisition further preserves the Company’s balance sheet
flexibility with close to US$480 million in cash.
- Minimal
dilution to Lithium Americas’ shareholders
- Based on Lithium
Americas’ closing price on October 29, 2021, the Offer would
provide Millennial Shareholders approximately 9.9% of Lithium
Americas.
Transaction
Details
The Offer provides
that Lithium Americas will, subject to certain conditions,
reimburse Millennial for the termination fee of US$20 million
payable to CATL if the CATL Agreement is terminated. Under the
terms of the Offer, Millennial will pay Lithium Americas a
termination fee of US$20 million in certain specified circumstances
and Lithium Americas will pay Millennial a reverse termination fee
of US$20 million, to be held in escrow, in certain specified
circumstances.
The board of directors
of Lithium Americas has unconditionally authorized and approved the
Offer (with the representative of Ganfeng Lithium Co., Ltd. on the
board recused).
Further details of the
Offer will be provided following the Matching Period if CATL does
not exercise its Match Right, and the Offer enters into a
definitive agreement by Millennial with Lithium Americas.
Advisors and
Counsel
Greenhill & Co. Canada Ltd. is acting as
financial advisor to Lithium Americas, and Cassels Brock &
Blackwell LLP is acting as Lithium Americas’ legal advisor.
Credit Suisse
Securities (Canada) Inc. is acting as financial advisor to
Millennial, and Dentons Canada LLP is acting as Millennial’s legal
advisor. Sprott Inc. is acting as financial advisor to the Special
Committee.
ABOUT LITHIUM
AMERICAS
Lithium Americas is a development-stage company
with projects in Jujuy, Argentina and Nevada, United
States. The Company trades on both the Toronto Stock Exchange
and on the New York Stock Exchange, under the ticker symbol
“LAC”.
For further information contact:Investor
RelationsTelephone: 778-656-5820Email:
ir@lithiumamericas.comWebsite: www.lithiumamericas.com
FORWARD-LOOKING STATEMENTS
This news release contains “forward-looking
information” and “forward-looking statements” (which we refer to
collectively as forward-looking information) under the provisions
of applicable securities legislation. All statements, other than
statements of historical fact, are forward-looking information,
examples of which in this news release include, among other things,
statements related to: Millennial entering into an agreement with
the Company in respect of the Offer; the satisfaction of all
conditions to such an agreement; the future completion of the
agreement to acquire all Millennial Common Shares; expected
benefits to shareholders of the Company and of Millennial from the
transaction; and expected milestones and timelines concerning the
Caucharí-Olaroz project.
Forward-looking information is based upon a
number of factors and assumptions that, if untrue, could cause the
actual results, performance or achievements of the Company to be
materially different from future results, performance or
achievements expressed or implied by such information. Such
information reflects the Company’s current views with respect to
future events and is necessarily based upon a number of assumptions
that, while considered reasonable by the Company today, are
inherently subject to significant uncertainties and contingencies.
These assumptions include, among others: CATL not exercising the
Match Right under the CATL Agreement; the performance of the
Company’s shares through to completion of the transactions
contemplated by the Offer being stable; the approval of Millennial
shareholders of the transaction; changes to the Company’s current
and future business plans and the strategic alternatives available
to the Company; favourable treatment of the transaction under
applicable anti-competition laws; stock market conditions
generally; demand, supply and pricing for lithium; and general
economic and political conditions in Argentina and other
jurisdictions where the Company conducts business.
Additional risks, assumptions and other factors
upon which forward-looking information is based, as it pertains to
the Company and its properties, are set out in the Company’s
management discussion and analysis and most recent annual
information form, copies of which are available on SEDAR at
www.sedar.com.
Although the Company has attempted to identify
important risks and assumptions, given the inherent uncertainties
in such forward-looking information, there may be other factors
that cause results to differ materially. Forward-looking
information is made as of the date hereof and the Company does not
intend, and expressly disclaims any obligation to update or revise
the forward-looking information contained in this news release,
except as required by applicable law. Accordingly, readers are
cautioned not to place undue reliance on forward-looking
information.
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