Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) and Millennial Lithium Corp. (TSX-V: ML) (A3N2:GR: Frankfurt) (MLNLF: OTCQB) are pleased to announce that they have entered into a definitive arrangement agreement dated November 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 C$4.70 per ML Share, payable in common shares of Lithium Americas and C$0.001 in cash per ML Share, representing total consideration of approximately US$400 million. Based on Lithium Americas’ closing price on November 16, 2021, this consideration would result in Millennial Shareholders owning approximately 9.1% of Lithium Americas.
Prior to entering into the LAC Arrangement Agreement, Millennial terminated the arrangement agreement between Millennial and Contemporary Amperex Technology Co., Ltd. dated September 28, 2021, as amended and assigned to Canada Brunp Contemporary (Investment) Inc. on October 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 Caucharí-Olaroz as the largest new lithium carbonate operation to come online in over 20 years,” said Jonathan Evans, President and CEO 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 de-risking the development of Pastos Grandes and generating further upside for Millennial Shareholders.”
Benefits to Millennial Shareholders
Benefits to Lithium Americas Shareholders
Recommendation of Millennial Board of Directors
After consultation with its financial and legal advisors, and on the unanimous recommendation of the special committee of directors of Millennial, the LAC Arrangement Agreement has been approved unanimously by the board of directors of Millennial and the ML Board recommends that Millennial Shareholders and warrant holders of ML Share purchase warrants vote in favour of the LAC 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 LAC Transaction is fair, from a financial point of view, to Millennial Shareholders.
Transaction Conditions and Timing
The number of LAC Shares to be issued pursuant to the LAC Arrangement Agreement will be determined by the volume-weighted average trading price of the LAC Shares on the Toronto Stock Exchange on the twenty trading days immediately preceding the business day immediately before the effective date of the LAC Transaction, subject to a maximum of 25% of its issued share capital as at closing, notwithstanding the relevant 20-day VWAP calculation under the LAC Arrangement Agreement.
As disclosed in its press release issued on November 1, 2021, on October 30, 2021, Millennial received a non-binding proposal from Lithium Americas to acquire all of the issued and outstanding ML Shares at a price of C$4.70 per ML 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 LAC Arrangement Agreement. The LAC Transaction represents a premium of approximately 22.1% to the value of the consideration offered pursuant to the CATL Arrangement Agreement.
Pursuant to the LAC Arrangement Agreement, Lithium Americas has also reimbursed Millennial for the termination fee of US$20 million paid to CBC in respect of the termination of the CATL Arrangement Agreement.
The LAC 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 2/3% of votes cast by Millennial Shareholders; (ii) 66 2/3% 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 January 6, 2022. In addition to Voting Securityholder approval, the LAC 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 LAC Transaction provides for, among other things, customary ML 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 LAC Arrangement Agreement also provides for, among other matters, (i) a termination fee of US$20 million, 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 US$500,000 if the LAC Arrangement Agreement is terminated in certain other specified circumstances, and (iv) a reverse termination fee of US$20 million, 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 ML Shares in favour of the LAC Transaction.
Pursuant to the LAC Arrangement Agreement, all outstanding Millennial convertible securities, including the Warrants, stock options, restricted share units, performance share units and broker options, will be acquired by Lithium Americas and cancelled. The holders of Warrants will receive from Millennial a number of ML Shares equal to C$0.30 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 ML 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 LAC Transaction, such newly issued ML Shares will be acquired by Lithium Americas on the same terms as the other outstanding ML Shares.
Subject to certain conditions, including the parties obtaining the requisite regulatory approvals, the LAC Transaction is expected to close in January 2022.
Upon closing of the LAC Transaction, the ML 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 November 18, 2021, and expects to convene a new meeting on or about January 6, 2022.
Full details of the LAC Transaction are included in the LAC 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 LAC Arrangement Agreement and Circular will be made available on SEDAR under the issuer profile of Millennial at www.sedar.com.
This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.
Advisors and Counsel
Greenhill & Co. Canada Ltd. is acting as financial advisor to Lithium Americas and Cassels Brock & Blackwell LLP is acting as Lithium Americas’ legal advisor.
Credit Suisse Securities (Canada) Inc. is acting as financial advisor to Millennial and Dentons Canada LLP is acting as Millennial’s legal advisor. Sprott is acting as financial advisor to the Special Committee.
About Lithium Americas
Lithium Americas is a development-stage company with projects in Jujuy, Argentina and Nevada, United States.
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