Speculation is rife that European Lithium Ltd (ASX: EUR) is a takeover target, with the company placing its shares in a trading halt following speculation in the media along those lines.
The Australian Financial Review has published an article saying that European Lithium has been in talks with the NASDAQ-listed Critical Metals Corp (NASDAQ: CRML), with which it is also a joint venture partner.
Major takeover premium
The AFR reports that a potential takeover is in the wings, priced at 58 cents per share, more than double the 28.5 cents per share at which the company last traded.
The takeover offer would value European Lithium at about $1.2 billion, well up on the $489.1 million it is valued at currently.
European Lithium was not giving much away in the announcement it made to the ASX on Friday.
As the company said:
The trading halt is requested pending an announcement relating to media speculation of a potential control transaction. The Company requests that the trading halt remain in place until the earlier of the commencement of normal trading on Tuesday, 28 April 2026 or until the release of an announcement in respect of the above matter. There is no other information necessary to inform the market about and the Company is not aware of any reason why the trading halt should not be granted.
The AFR is reporting that European Lithium already owns a stake of about 37.5% in the NASDAQ-listed company.
Projects moving forward
The companies also jointly own the Tanbreez rare earths project in Greenland, where they announced recently that the government had approved the transfer of the remaining 50.5% stake in the project to Critical Metals, bringing its holding to 92.5%, while European Lithium owns the remainder.
European Lithium Executive Chair Tony Sage said at the time:
This is a game-changing moment for Critical Metals and solidifies its position as the controlling stakeholder in one of the world’s largest rare earth deposits. The full support and approval of the Greenlandic Government has removed the most significant structural overhang on the Tanbreez Project and provides the clarity to advance the Tanbreez Project to production with confidence.” “We are now progressing with momentum, supported by advancing technical programs, strong metallurgical results, and engagement with our offtake partners. Tanbreez is no longer a future project â it is a project in development.
European Lithium’s other major asset is the Wolfsberg lithium project in Austria.
The post Is this ASX lithium stock a takeover target? Sure looks like it appeared first on The Motley Fool Australia.
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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.