Pilbara Minerals has proposed to acquire Latin Resources (ASX:LRS), in a move that will diversify its revenue and expand its lithium asset base.
The acquisition is structured as a share scheme arrangement whereby Pilbara Minerals will acquire 100% of Latin Resources' shares and options in exchange for issuing new Pilbara Minerals shares to Latin Resources shareholders and option holders.
Under the terms of the scheme implementation agreement, each Latin Resources shareholder will receive 0.07 new Pilbara Minerals shares for each Latin Resources share held.
Post-transaction, Pilbara Minerals shareholders will hold approximately 93.6% of the enlarged company, while Latin Resources shareholders will own the remaining 6.4%.
The transaction represents a 57% premium to Latin Resources’ 10-day volume-weighted average price.
Chris Gale, Managing Director of Latin Resources, expressed optimism about the merger, noting, "This transaction unlocks the value of Salinas by de-risking funding and development."
The Latin Resources board has unanimously recommended the scheme, subject to an independent expert's conclusion that it is in the best interests of Latin Resources shareholders.
The merger is contingent on several conditions, including approval by Latin Resources shareholders and court approval.
An independent expert's report will be provided to ensure the transaction is in the best interests of shareholders.
Pilbara Minerals' acquisition of Latin Resources is in line with its strategy to diversify revenue and enhance its position as a leading lithium producer.
The Salinas Lithium Project in Brazil will notably augment Pilbara Minerals' asset portfolio, providing new market opportunities and leveraging its technical expertise in lithium extraction and processing.