(Bloomberg) -- A shareholder of Arcadium Lithium Plc has written to the board of the US miner urging it not to accept a low takeover offer, following a report that said Rio Tinto Plc is in talks to buy it.
A potential acquisition of Arcadium would be highly opportunistic and “require a significant premium to realise fair valuation for the business,” Tim Riordan and Michael Teran, portfolio managers at Blackwattle Investment Partners Pty, wrote in a letter dated Saturday.
Also read: Arcadium Lithium Jumps After Report of Potential Rio Tinto Deal
Lithium stocks have suffered as prices of the battery metal have slumped with slower sales of electric vehicles. Shares of Arcadium in the US tanked about 60% this year through Thursday, before the Reuters report, more than those of peers including Albemarle Corp. and Pilbara Minerals Ltd.
“The timing of this potential sale could not be at a more value destructive period for shareholders,” Riordan and Teran wrote, adding that the global lithium market appears to have bottomed and any sale price should be near $8 billion. The Reuters report said on Friday that the deal would value the lithium miner between $4 billion to $6 billion.
Speculation that Arcadium, which was formed through the merger of Allkem Ltd. and Livent Corp. in January, had become a takeover target for Rio Tinto has been swirling for months.
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