On oct 24, ganfeng lithium announced that its subsidiary Shanghai ganfeng and BacanoraLithiumPlc (Bacanora) have applied to the UK takeover panel to suspend the tender offer process due to the pending approval process by the Mexican government. The tender offer process will resume after the matter is approved by the Mexican government.
Ganfeng Lithium announced in May that it intended to make an offer for Bacanora for up to £190m. Investing a huge sum of money in the global "buy buy buy" has become one of the ways to strengthen the competitiveness of lithium mining industry.
In the 25th meeting of the fifth Board of Directors held on May 6, Ganfeng Lithium reviewed and approved the proposal on mining right investment and related party transaction involving the bid acquisition of Bacanora Company by Shanghai Ganfeng, a wholly-owned subsidiary. Agree that Shanghai Ganfeng, a wholly-owned subsidiary of the Company, shall make an offer to purchase all the issued shares of Bacanora Company (excluding the shares already held by Shanghai Ganfeng) with its own funds, and the transaction amount shall not exceed 190 million pounds.
It is understood that as early as May 2019, Ganfeng Lithium signed a non-compulsory legal binding Letter of Intent for strategic Cooperation with Bacanora to make strategic investment in the company. Before the completion of this transaction, Ganfeng International holds 17.41% of Bacanora's equity, while the delivery procedures of Ganfeng International's increase of Bacanora's equity proportion to 28.88% are still being handled, and Ganfeng International and Bacanora each hold 50% of Sonora's equity.
Upon completion of the transaction, GIFENG International will hold 100% of Bacanora. In this regard, Ganfeng Lithium has said that full control of Bacanora company is conducive to the company's business development, improve the core competitiveness, in line with the company's upstream and downstream integration and new energy vehicle industry development strategy.
However, the recent acquisition of the above items add "variable".
On October 22, Bacanora and Gifeng International issued a statement saying that they had suspended the timetable for Gifeng international to acquire the entire issued share capital of Bacanora until Mexican approval conditions are satisfied or waivers are obtained.
The Mexican antitrust review conditions are neither exempted nor fulfilled, and Mexico's Federal Economic Competition Commission (FECC) is reviewing the matter. Ganfeng international said FECC was in active discussions with the two companies and they were providing further information to the regulator. Gifeng international expects the suspension schedule to resume on the date the review conditions are satisfied or waived, and each condition of the offer must be satisfied or waived by December 31.
Ganfeng Lithium responded in a statement that the outcome of the offer is subject to uncertainty, depending on Bacanora shareholders' acceptance process and the final approval work of the Mexican government.
