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US critical minerals major Albemarle has confirmed a A$6.6-billion bid to acquire ASX-listed Liontown Resources.

Liontown on Monday announced that it had received a revised conditional and non-binding indicative proposal from Albemarle, which was offering A$3 a share in cash for the ordinary shares outstanding in Liontown.

Albemarle earlier this year made a non-binding indicative proposal of A$2.50 a share for Liontown, which the Australian company knocked back, saying it “substantially” undervalued the company.

The revised offer is subject to a number of conditions, including due diligence, the Liontown board unanimously recommending the proposal, and the entering into of a mutually acceptable scheme implementation deed.

Liontown told shareholders that the board had determined to grant Albemarle an opportunity to conduct a limited period of exclusive due diligence, subject to customary fiduciary exceptions, to enable it to put forward a binding proposal, subject to the parties agreeing to a mutually acceptable non-disclosure and exclusivity agreement.

For its part, Albemarle said the company was “working towards” executing a binding agreement to acquire Liontown, but noted that its submitted offer would be the best and final in the absence of a superior bid.

“The revised proposal delivers an immediate premium for Liontown investors and is expected to drive significant value creation for Albemarle shareholders. The transaction is consistent with Albemarle’s long-term growth and stated merger and acquisition strategy, as well as its disciplined approach to capital allocation and risk-adjusted value accretion. The revised proposal was unanimously approved by Albemarle’s board of directors,” the company said in a statement.

Liontown’s main asset is the 2.5-million-tonne-a-year Kathleen Valley operation which will produce 500 000 t/y of spodumene concentrate, and in year six of operations the company will look to increase the project capacity to 4-million tonnes a year, delivering 700 000 t/y of spodumene concentrate, within six years.