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Millennial Lithium Corp
Symbol ML
Shares Issued 97,861,400
Close 2021-11-17 C$ 4.63
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Lithium Americas firms up Millennial Lithium deal

2021-11-17 12:00 ET - News Release

See News Release (C-LAC) Lithium Americas Corp (2)

Mr. Jonathan Evans of Lithium reports

LITHIUM AMERICAS ENTERS INTO DEFINITIVE AGREEMENT TO ACQUIRE MILLENNIAL LITHIUM

Lithium Americas Corp. and Millennial Lithium Corp. have entered into a definitive arrangement agreement, dated Nov. 17, 2021, pursuant to which Lithium Americas has agreed to acquire all of the outstanding shares of Millennial by way of a plan of arrangement for $4.70 per Millennial Lithium share, payable in common shares of Lithium Americas, and 0.1 cent in cash per Millennial Lithium share, representing total consideration of approximately $400-million (U.S.). Based on Lithium Americas' closing price on Nov. 16, 2021, this consideration would result in Millennial shareholders owning approximately 9.1 per cent of Lithium Americas.

Prior to entering into the Lithium Americas arrangement agreement, Millennial terminated the arrangement agreement between Millennial and Contemporary Amperex Technology Co. Ltd. (CATL) dated Sept. 28, 2021, as amended and assigned to Canada Brunp Contemporary (Investment) Inc. (CBC) on Oct. 12, 2021, in accordance with its terms.

"This transaction is a rare opportunity to add a complementary lithium brine project and leverage our expertise developing Cauchari-Olaroz as the largest new lithium carbonate operation to come on line in over 20 years," said Jonathan Evans, president and chief executive officer of Lithium Americas. "We are confident Pastos Grandes can provide significant value for all shareholders as we execute on our growth strategy in the region over the coming years."

Farhad Abasov, president and CEO of Millennial, commented: "Millennial's board and management believe that the LAC arrangement agreement provides significant value to Millennial shareholders. The high premium to the CATL arrangement agreement highlights the quality of the Pastos Grandes project and the efforts by the Millennial team over the past four years. Lithium Americas brings significant technical expertise and financial flexibility derisking the development of Pastos Grandes and generating further upside for Millennial shareholders."

Benefits to Millennial shareholders:

  • Significant premium of approximately 22.1 per cent to the price offered under the CATL arrangement agreement;
  • Premium of approximately 27.4 per cent over the closing price of $3.69 for the Millennial Lithium shares on the TSX Venture Exchange as of Oct. 29, 2021 (the last trading date before the announcement of Lithium Americas' proposal to acquire Millennial);
  • By having the ability to receive Lithium Americas' shares, Millennial shareholders will have an opportunity to participate in any potential increase in the value of Lithium Americas after closing;
  • Lithium Americas shares are listed on the New York Stock Exchange and the Toronto Stock Exchange and are expected to have increased trading liquidity compared to the Millennial Lithium shares;
  • Voting support with support and voting agreements entered into with directors and senior officers of Millennial.

Benefits to Lithium Americas shareholders:

  • The addition of Millennial's Pastos Grandes lithium brine project in Salta province provides an attractive regional growth opportunity in proximity to Cauchari-Olaroz with the potential for Lithium Americas to extract significant synergies.
  • The acquisition of Millennial bolsters Lithium Americas' growth pipeline while preserving cash on hand ($482-million (U.S.) in cash and cash equivalents as of Sept. 30, 2021) for the development of Thacker Pass.
  • Based on Lithium Americas' closing price on Nov. 16, 2021, the Lithium Americas arrangement agreement minimizes the dilution to Lithium Americas shareholders, providing Millennial shareholders approximately 9.1 per cent of Lithium Americas.

Recommendation of Millennial board of directors

After consultation with its financial and legal advisers, and on the unanimous recommendation of the special committee of directors of Millennial, the Lithium Americas arrangement agreement has been approved unanimously by the board of directors of Millennial and the Millennial board recommends that Millennial shareholders and warrantholders of Millennial share purchase warrants vote in favour of the Lithium Americas transaction. The special committee has received an oral fairness opinion from Sprott Capital Partners LP which states that the consideration to be received by Millennial shareholders pursuant to the Lithium Americas transaction is fair, from a financial point of view, to Millennial shareholders.

Transaction conditions and timing

The number of Lithium Americas shares to be issued pursuant to the Lithium Americas arrangement agreement will be determined by the volume-weighted average trading price (VWAP) of the Lithium Americas shares on the Toronto Stock Exchange on the 20 trading days immediately preceding the business day immediately before the effective date of the Lithium Americas transaction, subject to a maximum of 25 per cent of its issued share capital as at closing, notwithstanding the relevant 20-day VWAP calculation under the Lithium Americas arrangement agreement.

As disclosed in its press release issued on Nov. 1, 2021, on Oct. 30, 2021, Millennial received a non-binding proposal from Lithium Americas to acquire all of the issued and outstanding Millennial shares at a price of $4.70 per Millennial share and notified CATL that this proposal constituted a superior proposal in accordance with the terms of the CATL arrangement agreement. CATL did not exercise its right to match and, as a result, Millennial terminated the CATL arrangement agreement in accordance with its terms and entered into the Lithium Americas arrangement agreement. The Lithium Americas transaction represents a premium of approximately 22.1 per cent to the value of the consideration offered pursuant to the CATL arrangement agreement.

Pursuant to the Lithium Americas arrangement agreement, Lithium Americas has also reimbursed Millennial for the termination fee of $20-million (U.S.) paid to CBC in respect of the termination of the CATL arrangement agreement.

The Lithium Americas transaction will be effected by way of a court-approved plan of arrangement under the British Columbia Business Corporations Act and will be subject to the approval of (i) 66-2/3rds per cent of votes cast by Millennial shareholders; (ii) 66-2/3rds per cent of votes cast by voting securityholders, voting together as a group; and (iii) a simple majority of the votes cast by voting securityholders excluding for this purpose the votes held by any person required under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions), at a special meeting of voting securityholders expected to be held on or about Jan. 6, 2022. In addition to voting securityholder approval, the Lithium Americas transaction is also subject to the receipt of certain regulatory and court approvals, including Competition Act approval, the approvals of the TSX and the NYSE, and other closing conditions customary in transactions of this nature.

The Lithium Americas transaction provides for, among other things, customary Millennial board support and non-solicitation covenants, with a fiduciary-out that would allow Millennial to accept a superior proposal, subject to a right-to-match period in favour of Lithium Americas. The Lithium Americas arrangement agreement also provides for, among other matters, (i) a termination fee of $20-million (U.S.), payable by Millennial to Lithium Americas in certain specified circumstances, (ii) the reimbursement of the existing termination amount from Millennial to Lithium Americas in certain specified circumstances, (iii) the reimbursement of Lithium Americas' expenses up to $500,000 (U.S.) if the Lithium Americas arrangement agreement is terminated in certain other specified circumstances, and (iv) a reverse termination fee of $20-million (U.S.), held in escrow and payable by Lithium Americas to Millennial in certain other specified circumstances.

All directors and senior officers of Millennial have entered into support and voting agreements pursuant to which they have agreed to vote their Millennial in favour of the Lithium Americas transaction.

Pursuant to the Lithium Americas arrangement agreement, all outstanding Millennial convertible securities, including the warrants, stock options, restricted share units (RSUs), performance share units (PSUs) and broker options, will be acquired by Lithium Americas and cancelled. The holders of warrants will receive from Millennial a number of Millennial shares equal to 30 cents multiplied by the number of warrants held by each such holder divided by the purchase price. The holders of options, RSUs, PSUs and broker options will receive from Millennial a number of Millennial shares equal to the number of such securities held by each such holder multiplied by the amount by which the purchase price exceeds the exercise price of such securities (if applicable) divided by the purchase price. Pursuant to the Lithium Americas transaction, such newly issued Millennial shares will be acquired by Lithium Americas on the same terms as the other outstanding Millennial shares.

Subject to certain conditions, including the parties obtaining the requisite regulatory approvals, the Lithium Americas transaction is expected to close in January, 2022.

Upon closing of the Lithium Americas transaction, the Millennial shares and warrants are expected to be concurrently delisted from the TSX Venture Exchange. The delisting is conditional upon TSX Venture Exchange approval.

In light of these developments, Millennial has cancelled the special meeting of voting securityholders scheduled to be held on Nov. 18, 2021, and expects to convene a new meeting on or about Jan. 6, 2022.

Full details of the Lithium Americas transaction are included in the Lithium Americas arrangement agreement and will be included in a management information circular of Millennial that is expected to be mailed to voting securityholders in December, 2021. The Lithium Americas arrangement agreement and circular will be made available on SEDAR under the issuer profile of Millennial.

Advisers and Counsel

Greenhill & Co. Canada Ltd. is acting as financial adviser to Lithium Americas and Cassels Brock & Blackwell LLP is acting as Lithium Americas' legal adviser.

Credit Suisse Securities (Canada) Inc. is acting as financial adviser to Millennial and Dentons Canada LLP is acting as Millennial's legal adviser. Sprott is acting as financial adviser to the special committee.

About Lithium Americas Corp.

Lithium Americas is a development-stage company with projects in Jujuy, Argentina, and Nevada, United States.

We seek Safe Harbor.

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