Benzinga | Nov 1, 2021 08:24AM EDT

Lithium Americas Reports Submission Of Unconditional Offer To Millennial Lithum To Buy All Shares At C$4.70/Share In Cash, Or $400M In Total

Lithium Americas Corp. (TSX:LAC) (NYSE:LAC) ("Lithium Americas" or the "Company") is pleased to announce that it has submitted an unconditional offer to Millennial Lithium Corp. ("Millennial") to acquire all of the outstanding shares (each, a "Common Share") of Millennial (the "Offer"). Under the terms of the Offer, on closing, each Millennial shareholder ("Millennial Shareholder") will receive C$4.70 per Common Share, payable in Lithium Americas common shares and C$0.001 in cash per Common Share (the "Purchase Price"), representing total consideration of approximately US$400 million. Based on the Company's closing price on October 29, 2021, this consideration would result in Millennial Shareholders owning approximately 9.9% of Lithium Americas.

"In proximity to Cauchar?-Olaroz, Millennial's 100%-owned Pastos Grandes lithium brine project represents an attractive regional growth opportunity for Lithium Americas," said Jonathan Evans, President and CEO. "As we bring Cauchar?-Olaroz into production over the next year and continue to advance our Stage 2 expansion planning, the addition of this highly complementary lithium brine resource further enhances our long-term growth strategy in Argentina and leverages our technical and development expertise."

The board of directors of Millennial (the "Millennial Board"), after consultation with Millennial's financial and legal advisors, and after considering a recommendation from the Special Committee of the Millennial Board, has unanimously determined that the Offer constitutes a "Superior Proposal" in accordance with the terms of the arrangement agreement between Millennial and Contemporary Amperex Technology Co., Ltd. ("CATL") dated September 28, 2021, as assigned and amended on October 12, 2021 (the "CATL Agreement").

In accordance with the CATL Agreement, Millennial has notified CATL that it considers the Offer to be a Superior Proposal and that the ten business day matching period (the "Matching Period") has commenced, during which CATL has the right, but not the obligation, to propose to amend the terms of the CATL Agreement in order for the Offer to cease to be a Superior Proposal (the"Match Right"). The Matching Period expires at 4:30 p.m. (Pacific Time) on November 16, 2021.

Benefits to Millennial Shareholders

* Purchase Price provides premium over CATL Agreement Purchase Price of C$4.70 per Common Share payable in Lithium Americas common shares (based on a floating exchange ratio / fixed value per share) and C$0.001 in cash per Common Share represents a premium of C$0.85 (22.1%) per Common Share to the CATL Agreement and C$1.01 (27.4%) per Common Share to Millennial's closing price as of October 29, 2021.

* Offer not subject to financing conditions or regulatory review Lithium Americas' shares trade on both the TSX and NYSE and are highly liquid providing Millennial Shareholders with the optionality to either crystalize value today or participate in potential future upside in the combined entity.

* Option for a potential tax-deferred rollover for certain shareholders Stock consideration allows flexibility from a tax planning perspective for certain Millennial Shareholders.

Benefits to Lithium Americas Shareholders

* Attractive regional growth opportunity in proximity to Cauchar?-Olaroz Millennial's Pastos Grandes lithium brine project in Salta province, Argentina, is approximately 100 km from Cauchar?-Olaroz. In 2019, Millennial prepared a feasibility study that supports production of 24,000 tonnes per annum of battery-quality lithium carbonate for 40 years, with an initial capital cost of US$448 million and operating cost of US$3,388/tonne.

* Bolsters Lithium Americas' growth pipeline while preserving cash on hand The addition of a complementary and advanced stage resource significantly expands Lithium Americas' growth pipeline in Argentina, without distracting management from existing operations. The primarily stock acquisition further preserves the Company's balance sheet flexibility with close to US$480 million in cash.

* Minimal dilution to Lithium Americas' shareholders Based on Lithium Americas' closing price on October 29, 2021, the Offer would provide Millennial Shareholders approximately 9.9% of Lithium Americas.

Transaction Details

The Offer provides that Lithium Americas will, subject to certain conditions, reimburse Millennial for the termination fee of US$20 million payable to CATL if the CATL Agreement is terminated. Under the terms of the Offer, Millennial will pay Lithium Americas a termination fee of US$20 million in certain specified circumstances and Lithium Americas will pay Millennial a reverse termination fee of US$20 million, to be held in escrow, in certain specified circumstances.

The board of directors of Lithium Americas has unconditionally authorized and approved the Offer (with the representative of Ganfeng Lithium Co., Ltd. on the board recused).

Further details of the Offer will be provided following the Matching Period if CATL does not exercise its Match Right, and the Offer enters into a definitive agreement by Millennial with Lithium Americas.

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 Inc. is acting as financial advisor to the Special Committee.