Tecpetrol Investments is not giving up on acquiring all outstanding common shares of Alpha Lithium Corporation (NEO: ALLI), announcing this morning a significant enhancement to its all-cash offer. In a bid to secure shareholder support, Tecpetrol has raised the offer price to $1.48 per share, reflecting a substantial premium and signaling its unwavering commitment to the transaction.
Tecpetrol’s revised all-cash offer now stands at $1.48 per share, a substantial increase from the original offer of $1.24 per share. This represents a notable 19% improvement in the value of the offer, providing Alpha shareholders with an enhanced opportunity for value realization.
The offer presents a 42% premium over the volume-weighted average price of Alpha shares in the 20 trading days leading up to Tecpetrol’s public disclosure of its intent to make the offer. It also offers a 29% premium over the closing price of Alpha shares on May 19, 2023, the final trading day before Tecpetrol’s announcement of its intention, and a 24% premium over the closing price of Alpha shares on September 21, 2023, which was the last trading day before this announcement was made.
On top of this, the firm has also lowered the minimum tender condition from two-thirds to a majority of Alpha’s outstanding shares, making it easier for shareholders to participate in the offer.
This announcement comes after Tecpetrol and Alpha executed a confidentiality agreement in August 2023, which initiated discussions regarding a potential merger. Unfortunately, these discussions have come to an end without reaching an agreement on terms for a board-supported transaction.
Shareholders who had already tendered their shares to the offer prior to this announcement will automatically benefit from the new offer price if the minimum tender condition is met and the offer proves successful.
Tecpetrol’s decision to present this enhanced offer reflects its comprehensive evaluation of Alpha’s value, including the company’s assets such as Tolillar and Hombre Muerto, along with an assessment of the expected net cash position.
The announcement also came on the heels of Alpha Lithium filing the results this week of a preliminary economic assessment for its wholly-owned Tolillar lithium brine project, an updated report from its inaugural version back in July.
“Even with conservative estimates, Alpha’s Tolillar project continues to be a significant lithium carbonate project with exceptional and increasing potential. Today’s filing of PEA #2 details the $2.3 billion NPV potential of the Tolillar project, and we look forward to realizing that value to the benefit of our shareholders,” said CEO Brad Nichol.
In May, Alpha Lithium turned down Tecpetrol’s initial proposal of $1.24 per share, characterizing it as “opportunistic” and not aligned with the best interests of its shareholders.
Tecpetrol has stated that it does not intend to further extend or modify the offer terms beyond the new bid. Should this improved offer fail to garner sufficient shareholder support, Tecpetrol has asserted its intention to explore other opportunities within the lithium sector.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
