The Iluka Resources Limited (ASX: ILU) share price surged this morning even after management dismissed speculation that it could have found a buyer for its troubled Sierra Leone asset.

The Iluka share price jumped 4.1% to $8.11 in morning trade, which makes it the fourth best performer on the S&P/ASX 200 Index (Index:^AXJO).

Coincidentally, all the best performers on the index are mining shares. The leader is the IGO Ltd (ASX: IGO) share price with a 6.1% rally. It’s followed by the Chalice Mining Ltd (ASX: CHN) share price and the Pilbara Minerals Ltd (ASX: PLS) share price.

Iluka share price jumps on divestment rumour

The big rally follows the drubbing on the ASX yesterday and investors won’t let the quashing of a rumour spoil their bounce-back party.

Iluka acknowledged media speculation that it was moving closer to selling its rutile operations in the African nation. But management said it has nothing new to report.

A number of news outlets, including The Australian, wrote that a number of potential suitors may be knocking on Iluka’s door.

Divestments are an exciting business for ASX companies. Remember that Iluka only recently successfully spun-off Deterra Royalties Ltd (ASX: DRR).

Sierra Rutile on the auction block

Iluka said last month that it informed the Sierra Leone government that it was considering mothballing the money-losing mine by November.

In the meantime, Iluka would look at ways to keep the mine operating. This includes bringing in a partner or selling the asset.

Assets in Africa aren’t typically the easiest to flog given the continent’s volatile geo-political environment.

Cashed-up and motivated Chinese buyer

But The Australian reported that China’s Lomon Billions may be a hot contender. There are a few reasons to believe why Lomon could be eager.

Firstly, the Shenzhen-listed major is eyeing a secondary listing on the Hong Kong stock exchange. Using its large war chest to add assets ahead of the new float would attract better support from Hong Kong investors.

Further, China seems to have a smoother relationship with Africa than with many other parts of the world.

This makes Sierra Rutile a more palatable buy for Lomon than other assets in Australia or India – countries that Lomon said it was looking at.

Other potential suitors

But Chinese suitors may not be the only ones willing to run the ruler over Sierra Rutile. European major Kronos Worldwide isn’t spared from the rumour mill. Kronos already has an offtake agreement with Iluka at Sierra Rutile.

It may be tempted to move up the value chain, particularly at a time when commodity prices are buoyant.

This takes me to a more important point. The real reason Iluka’s share price may be running could be due to speculation about a profit upgrade.

A better reason for Iluka’s share price rally

Iluka may be able to negotiate a substantial increase in zircon prices as contracts come up for renewal.

Some media reports suggest Iluka could add around US$125 a tonne as zircon supply is tightening. This is in part due to problems at the Richard’s Bay operations in South Africa, which is owned by Rio Tinto Limited (ASX: RIO).

At least speculation about the price increase seems to be on more solid footing than rumours about looming asset sales.

The post Iluka (ASX:ILU) share price jumps even as it pours water on M&A rumours appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to sell today
• Here’s why the IGO (ASX:IGO) share price is racing 9% higher today
• 5 things to watch on the ASX 200 on Tuesday
• Why are blue-chip ASX 200 shares selling off today?
• Rio Tinto (ASX:RIO) share price sinks on broker downgrade

Brendon Lau owns shares of Iluka Resources Limited, Rio Tinto Limited, Deterra Royalties Limited and IGO Ltd. Connect with me on Twitter @brenlau.

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/35FfCBi

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Volatility has returned to the stock market, but finally, the Nasdaq Composite (NASDAQINDEX: ^IXIC) is starting to make waves once again. The tech-heavy index is making a run toward all-time highs, trading within 1% of its high-water mark on Monday afternoon. As of just before 2 p.m. EDT today, the Nasdaq was higher by three-quarters of a percent.

It wasn’t that long ago that investors figured that stocks of COVID-19 vaccine manufacturers had already seen their best days. Companies like Moderna (NASDAQ: MRNA) and BioNTech (NASDAQ: BNTX) had seen their share prices start to give up ground as many believed that a vaccinated world would eventually cause revenue and profits to dry up for the vaccine makers. Now, though, it’s becoming increasingly clear that the two companies could well have a much brighter future than many had thought.

More moves for Moderna and BioNTech

Shares of the vaccine manufacturers were among the leaders on the Nasdaq today. Moderna’s gains amounted to more than 5%, while BioNTech boasted gains of 6% or more on the day.

The general sentiment toward BioNTech and Moderna has been positive because of just how effective their vaccines have been. Last month, the U.S. Centers for Disease Control and Prevention released the latest figures on efficacy for the messenger-RNA-based vaccines from the two companies. Data from real-life use showed a reduction in infection risks of 91%. Those who got infected had a 60% lower risk of showing symptoms, and they spent on average six days fewer being sick and two days fewer stuck in bed recovering.

In addition, the companies have benefited from sustained demand for COVID vaccines from countries around the world. On Monday, BioNTech said that it had received provision approval of its vaccine from regulators in New Zealand. Over the weekend, the government of the Philippines announced a 40-million-dose agreement with BioNTech and Pfizer (NYSE: PFE) for more vaccine doses as well.

More broadly, some health officials have started talking about the potential need for vaccine booster shots. It’s uncertain at this point whether and how quickly antibody levels from initial vaccinations decline, and so it’s entirely possible that even those who’ve already received vaccinations could need additional doses in the future. From a business standpoint, that would create even further demand for Moderna and BioNTech that could dramatically lengthen the expected flow of revenue stemming from COVID vaccines.

Will existing vaccines be enough?

The biggest threat on the COVID front comes from the potential for the virus to mutate into more-dangerous variants. Already, the Delta variant has proved to be more easily transmitted among infected patients and with more-severe health impacts. Future variants could prove even more problematic, and there’s no guarantee that existing vaccines will provide protection against them all.

For the most part, both Moderna’s and BioNTech’s stock prices seem to reflect little expectation of success beyond the current COVID vaccine products. Yet if anything, COVID has proved that the broader-based investing thesis behind mRNA-based treatment development is sound. Both companies have plans for vaccines and other treatments for a wider variety of different medical conditions, and success anywhere on that front could provide the positive surprise investors need to gain confidence in the long-term futures of these stocks.

If you made the mistake of thinking that COVID vaccine stocks would be done once much of the U.S. population had been vaccinated, you aren’t alone. But you might be surprised at how much staying power BioNTech and Moderna could have — especially if a few things end up working out in their favor.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post If you thought these 2 big Nasdaq winners were done, think again appeared first on The Motley Fool Australia.

More reading

• Moderna files for FDA approval of its COVID vaccine in teens
• Here’s how Moderna plans to beat the biggest threat to its vaccine
• Moderna’s teen COVID-19 vaccine trial hits high marks

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Moderna Inc. 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 Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/3vN3lFq

The Adairs Ltd (ASX: ADH) share price is climbing on Tuesday following an update on the acquisition of Mocka.

Founded in 2007, Mocka is an online furniture business based in Brisbane, Australia, and in Christchurch, New Zealand. The company sells home furniture and décor as well as kids and baby products.

In mid-morning trade, Adairs shares are up 1.53% to $4.64.

Let’s take a closer look and see what the company announced.

Adairs brings forward Mocka acquisition

Investors are snapping up Adairs shares after the company provided some positive news.

According to its release, Adairs stated that it has entered into an agreement with the vendors of Mocka to bring forward a settlement.

Back in November 2019, Adairs signed a purchase agreement for the deferred consideration component of Mocka. The 35% interest was to be split across two tranches on 30 September 2021 (15%), and in September 2022 (20%). The payable amount was based on the previous years of underlying earnings before interest and tax (EBIT).

However, under the revised agreement, Adairs will pay NZ$48 million (A$45 million) in September 2021 to acquire the entire 35% stake. This will be funded by the company’s existing cash and term debt facilities.

In total, Adairs will have paid NZ$100 million (A$95 million) for the whole of Mocka following the September 2021 payment. This equates to around 7 times FY21’s EBIT forecast for Mocka.

Adairs managing director and CEO, Mark Ronan commented:

This is a positive development for Adairs. Mocka has performed ahead of the expectations we had of the business when we acquired it in December 2019. Since then, our understanding of and confidence in the potential for the business has continued to develop, especially the scope for substantial further growth in Australia.

The early settlement of the deferred consideration enables the business to continue to invest in the short-term to realise the long-term potential that is beyond the time horizon of the founders. The total consideration paid for the business represents excellent value for Adairs shareholders.

In addition, Adairs noted that it expects to announce a new CEO for Mocka in August 2021. In the interim, the founders will remain in the business to support the transition until 30 September 2021.

Adairs share price review

It has been a strong 12 months for the Adairs share price, reaching a record high of $4.97 in late April. The company’s shares have continued their upwards trajectory, gaining almost 40% in 2021 alone.

Based on today’s price, Adairs commands a market capitalisation of roughly $772 million, with approximately 169 million shares outstanding.

The post Why the Adairs (ASX:ADH) share price is edging higher today appeared first on The Motley Fool Australia.

More reading

• 4 factors that could make the Temple & Webster (ASX:TPW) share price a buy
• Got money to invest? Here are 2 ASX shares that could be buys
• Got cash to invest for dividends? Here are 2 ASX shares that could be buys
• Got money to invest for dividends? Here are 2 ASX shares that could be buys

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3iXtkHt

The Monadelphous Group Limited (ASX: MND) share price is gaining in morning trade, up 2%.

The engineering company provides construction, maintenance and industrial services to the resource, energy and infrastructure sectors.

Below we look at its latest contracts update.

What did Monadelphous announce?

The Monadelphous share price is rising after the company reported it had secured several new construction and maintenance contracts.

The contracts, in the resources sector, are worth a total of roughly $215 million.

BHP Olympic Dam Corporation has engaged Monadelphous for smelter campaign maintenance works at its Olympic Dam copper mine in South Australia. Monadelphous said it will start work straight away, with the contracted work expected to be completed in December.

Monadelphous already has a separate maintenance services contract at Olympic Dam. This morning it reported a 2-year extension to that contract. This will include “civil, structural, mechanical, building maintenance and electrical services, as well as the addition of underground rail maintenance services”.

The company also reported it has secured several sustaining capital contracts under its panel agreements with Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP) in the Pilbara region of Western Australia.

The contract with Rio will see Monadelphous provide construction and support services for the Gudai-Darri iron ore project. That work is expected to be completed by the end of 2021.

Monadelphous is also active internationally. It reported that its maintenance and construction services segment, Buildtek, has been awarded a 3-year contract in Chile with Codelco.

Monadelphous will manage the operations and maintenance of water infrastructure at Codelco’s Chuquicamata underground mine in Calama, Chile.

The company also received 2 other new contracts with Codelco as well as one with BHP Minera Escondida to construct “modularised pump stations and associated infrastructure” at the Escondida copper mine in Coloso, Chile.

Monadelphous share price snapshot

Monadelphous shares have been under pressure over the past 12 months, down 10%. By comparison the S&P/ASX 200 Index (ASX: XJO) has gained 23% in that same time.

Year-to-date the Monadelphous share price has continued to underperform, down 26%.

The post Why the Monadelphous (ASX:MND) share price is marching higher appeared first on The Motley Fool Australia.

More reading

• Best ASX value buys for the commodities supercycle
• 2 ASX shares this fund manager thinks could be cheap
• ASX 200 Weekly Wrap: ASX whipsaws in volatile week

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3j2byDc

The Acrux Limited (ASX: ACR) share price has been an exceptionally strong performer on Tuesday.

In morning trade, the pharmaceutical company’s shares are up a massive 39% to 16 cents.

Why is the Acrux share price rocketing higher?

The catalyst for the rise in the Acrux share price this morning has been the release of a very positive update.

According to the release, the US Food and Drug Administration (FDA) has granted approval of the company’s generic version of Jublia (efinaconazole) topical solution.

Jublia is an FDA-approved prescription topical solution that is applied on, around, and under the toenail. It reaches the site of onychomycosis to fight the fungus that lives beneath the nail. Acrux notes that Jublia sales currently exceed US$217 million per year in the United States.

This has been a lengthy process for Acrux. The company first submitted an abbreviated new drug application (ANDA) to seek approval from the FDA in June 2018. It has also been through a patent dispute, which has since been settled.

Positively, this is the company’s second generic product that has been approved by the FDA this year. In January, Acrux was given approval for a generic version of Perrigo’s Testosterone Topical Solution. This product has a US$25 million market opportunity in the United States at present.

What now?

Following the receipt of approval from the FDA, Acrux will progress licensing negotiations with a commercial licensee to commercialise the product. This will be in accordance with the terms of the patent settlement agreement. When launched, Acrux’s product will provide a lower cost alternative to Jublia for patients in the United States.

Despite today’s impressive gain, it is worth noting that the Acrux share price is still trading slightly lower year to date. Shareholders will no doubt be hoping it is onwards and upwards from here for its shares.

The post Why the Acrux (ASX:ACR) share price is rocketing 39% higher today appeared first on The Motley Fool Australia.

More reading

• Why the Talga (ASX:TLG) share price is up 6% today
• Is Cathie Wood selling Netflix stock at the worst possible time?
• Top broker says the Commonwealth Bank (ASX:CBA) share price is still overvalued
• Here’s why the IGO (ASX:IGO) share price is racing 9% higher today
• Openpay (ASX:OPY) share price shoots higher on UK acquisition

James Mickleboro does not own any shares 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3wPiEih

Shares in Talga Group Ltd (ASX: TLG) are shooting up this morning after the technology minerals company announced it has teamed up with Norwegian clean battery solutions business, FREYR.

In opening trade this morning, the Talga share price is up 6% trading at $1.495.

Talga partners up

In today’s statement, Talga advised it has signed a Memorandum of Understanding (MOU) for the supply of battery anode materials to FREYR.

Both companies are seeking to develop a local Nordic supply chain to produce clean, low-cost batteries.

Under the MOU, a framework will be established to help accelerate FREYR’s battery cell production under development in Norway. This will see a large-scale commercial supply of Talga’s Talnode range of anode materials to FREYR’s battery production facilities.

Both companies stated they were open to discussing binding long-term agreements such as licencing Talga’s anode technologies, or joint ventures.

In addition, a study will be assessed into looking at re-locating Talga operations within FREYR’s planned operations. It is thought that working side-by-side could potentially benefit battery manufacturing at an industrial level.

The non-binding MOU is valid for a period of 2-years, allowing enough time for a formal agreement to arise.

Management commentary

Talga managing director, Mark Thompson welcomed the MOU, saying:

We are very pleased to be working with FREYR to explore the use of our world-leading graphite and silicon anode materials and technology in their sustainable, high-performance battery cells. Additionally, we are pleased to discuss potential synergies towards strengthening our respective strategic positions in the global electric vehicle battery supply chain.

FREYR CEO, Tom Einar Jensen went on to add:

Developing a local supply of battery materials made with renewable energy under strong ethical and governance frameworks is a key element of FREYR’s strategy. By combining next-generation cell design and production technology with Norway’s low-cost renewable energy, and by unlocking sustainable localized supply chains enabled by companies such as Talga, FREYR is moving closer to realizing our ambition of producing large volumes of low-cost battery cells with one of the lowest carbon contents in the world.

About the Talga share price

Over the past 12 months, Talga shares trekked higher to register a gain of more than 200% for investors. However, the share price increase came predominately from the back end of last year.

In 2021, the Talga share price has moved sideways in 2021, down almost 13% year-to-date.

Talga presides a market capitalisation of roughly $427 million, with around 303 million shares on issue.

The post Why the Talga (ASX:TLG) share price is up 6% today appeared first on The Motley Fool Australia.

More reading

• Talga (ASX:TLG) share price climbs on positive feasibility studies
• Why a2 Milk, Fortescue, Infomedia, & Talga shares are pushing higher

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3xGOYEc

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

One of the market’s hottest stock pickers is cooling on Netflix (NASDAQ: NFLX) these days. It could prove to be a costly mistake. 

ARK Invest’s Cathie Wood has been trimming her stake in the world’s leading service for premium streaming video. She has sold Netflix shares in ARK Next Generation Internet ETF (NYSEMKT: ARKW) four times over the past five weeks. 

The exchange-traded fund has been one of the market’s biggest winners, up a scintillating 183% through the past four quarters. It’s true that owning Netflix has actually held Wood’s high-flying ETF back. Reed Hastings’ company only gained 39% in that time. However, history favors those who are long Netflix. 

Screening test

Wood isn’t necessarily bearish on Netflix. It continues to be among the fund’s holdings, and she has added to her Netflix position in one of her smaller ETFs. However, selling four small blocks of shares over the past few weeks (with the largest of the transactions taking place this past Friday) doesn’t make it seem as if she’s done reducing her position. 

Netflix would appear to be a model for any risk-tolerant investor eyeing disruptive growth investments. The company put premium streaming on the map, and by the end of March its subscriber ranks stood at 207.6 million active accounts. Most of its growth lately has come internationally, where it’s just starting to scratch the surface when it comes to reshaping the way viewers enjoy video entertainment. 

It’s hard to argue that Netflix isn’t the equivalent of basic cable in the non-linear television world. No one is building out its content catalog faster than Netlix, and no one knows its viewers better than the pioneer in this niche, after collecting data on binge habits for more than a dozen years. 

A testament to the power of Netflix is that it has increased its monthly ransoms for stateside customers five times over the past seven years. It continues to grow its user base despite the 75% price hike in that time. Its U.S. audience has doubled in that time, and its global audience has more than quadrupled. 

We might arrive at the day when Netflix finally overestimates its pricing elasticity, but until then, it continues to earn its share of the entertainment dollar by spending more and more on content. This is a scalable business, and the wider it grows its audience, the more value it can deliver per subscriber. 

It’s hard to bet against Hastings and his team. Even when Netflix seems to do something small (like the low-key opening of an online merch store), it has a high chance of success because of its highly engaged audience. Wood obviously knows what she’s doing, and the success of ARK Next Generation Internet ETF — where Netflix was a relative drag on performance over the past year — bears that out.

However, Netflix also has a longer track record of success than many of the fund’s larger holdings. It also has proved its all-weather appeal, growing in times of economic expansion and contraction. Just as Netflix is becoming the world’s default service for premium streaming video, it should also be standard in growth portfolios. One can’t deny Wood’s success when it comes to growth investing, but this time she might be selling the wrong stock.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Cathie Wood selling Netflix stock at the worst possible time? appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs that could give investors easy exposure to the US markets
• Streaming’s easy-growth days are over, Apple and Netflix face greatest risk
• 2 reasons Netflix will win its merchandising gambit
• 3 reasons the iShares S&P 500 ETF (ASX:IVV) could be a buy today
• 1 question Netflix has to answer

Rick Munarriz owns shares of Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/3wPfTgV

The Commonwealth Bank of Australia (ASX: CBA) share price was well and truly out of form on Monday.

The shares of Australia’s largest bank dropped a sizeable 5.7% to $98.06.

Why did the Commonwealth Bank share price tumble?

The Commonwealth Bank share price came under pressure on Monday after broad weakness in the banking sector offset the release of a positive announcement relating to another divestment.

In respect to the latter, the banking giant has signed an agreement to sell its general insurance business to underwriter Hollard Group for $625 million. It also includes undisclosed deferred payments that are payable upon achieving certain business milestones.

Furthermore, the agreement will see additional investment from Hollard throughout a 15-year strategic alliance to drive innovation and enhance the customer experience. Commonwealth Bank will also continue to earn income on the distribution of home and motor insurance products.

Should investors buy the dip?

Despite the sizeable pullback in the Commonwealth Bank share price on Monday, one leading broker doesn’t believe investors should be jumping in just yet.

According to a note out of Morgan Stanley, its analysts have retained their underweight rating and $89.50 price target on its shares. Based on the latest Commonwealth Bank share price, this price target implies potential downside of ~11% over the next 12 months.

The broker estimates that the deal with Hollard will boost its CET1 ratio by an estimated 9 basis points and expects it to support a $5 billion share buyback in August.

However, even after factoring this buyback into the equation, it isn’t enough for Morgan Stanley to become more positive on the bank. It notes that the company’s shares are trading on record high multiples and believes there is a better option for investors among the big four.

That option is Westpac Banking Corp (ASX: WBC). Earlier this month the broker put an overweight rating and $29.20 price target on its shares. This implies potential upside of ~10% over the next 12 months.

The post Top broker says the Commonwealth Bank (ASX:CBA) share price is still overvalued appeared first on The Motley Fool Australia.

More reading

• Why are blue-chip ASX 200 shares selling off today?
• ASX 200 drops, CBA sinks, Boral sells US division
• Why is the ASX 200 falling today? Thank CBA shares
• Why Codan, CommBank, Rio Tinto, & Starpharma shares are sinking
• Selling some ASX shares before tax time? Here’s what you should know

James Mickleboro owns Westpac shares. 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3xCBlpq

The IGO Ltd (ASX: IGO) share price is back on form and charging higher on Tuesday.

At the time of writing, the clean energy focused mining company’s shares are up 9% to $7.75.

Why is the IGO share price on the rise?

Investors have been buying the company’s shares on Tuesday after it provided an update on its lithium transaction.

According to the release, key regulatory requirements for the internal restructure of the Australian arm of Tianqi Lithium Corporation to proceed have now been satisfied. The internal restructure is one of the conditions precedent to the transaction to form a new lithium joint venture with Tianqii.

The company notes that this follows Australian foreign investment approval and notice from the Australian Taxation Office (ATO) confirming the tax migration of the joint venture entity to Australia.

And while the ATO engagement process is ongoing, in order to expedite completion of the transaction, the two parties have now agreed to proceed to completion. This is on the basis that if there were an unforeseen tax outcome resulting from the internal restructure, IGO would share the tax liability with Tianqi in proportion to its joint venture interest of 49%.

What now?

The two companies are now working hard to complete the transaction on or before 30 June 2021, once the remaining steps required to complete the internal restructure are completed.

IGO’s Managing Director and CEO, Peter Bradford, commented: “We are delighted to have reached this important milestone and we look forward to formally commencing our joint venture with Tianqi in the coming weeks.”

“As a priority, the joint venture will initially be focused on the commissioning of Train 1 at the Kwinana Lithium Hydroxide Refinery, as well as working with our partner, Albemarle, on the expansion opportunities at the world class Greenbushes Lithium Mine. Demand for high quality spodumene and lithium hydroxide has increased significantly over recent months, promising strong returns to our shareholders as this trend, driven by global decarbonisation and electric vehicle demand, continues into the future.”

The IGO share price is now up 58% over the last 12 months.

The post Here’s why the IGO (ASX:IGO) share price is racing 9% higher today appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to sell today
• IGO (ASX:IGO) and Regis (ASX:RRL) shares rise on Tropicana news
• 4 ASX shares every investor should consider adding to their portfolio: fundie

James Mickleboro does not own any shares 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3j1bqUc

The Openpay Group Ltd (ASX: OPY) share price is on the move on Tuesday morning.

At the time of writing, the buy now pay later (BNPL) provider’s shares are up 6% to $1.50.

Why is the Openpay share price is charging higher?

Investors have been bidding the Openpay share price higher this morning after it announced a “highly material” acquisition.

According to the release, the company has entered into an agreement to acquire 100% of Payment Assist for GBP11.5 million upfront, plus an earn-out component of up to GBP17 million. This comprises GBP8.2 million cash and GBP3.3 million in Openpay scrip, payable at completion.

Payment Assist is a leading BNPL provider to the UK automotive sector. The release notes that based on their respective calendar year 2020 performances, the combined UK entity would have recorded total transaction value (TTV) of GBP121.7 million. This is almost triple the UK TTV Openpay recorded of GBP43.6 million during the year. It would also have increased its revenue in the key market from GBP2.4 million to GBP8.4 million.

In respect to the impact on its overall business, management notes that the combined pro-forma group TTV for 2020 would have been 52% higher at $416.8 million. Whereas group revenue would have lifted by 47.4% to $34.2 million.

Openpay’s CEO and Managing Director, Michael Eidel, said: “In Payment Assist, we saw a unique opportunity to acquire a profitable, market-leading player in the £26.7 billion UK addressable automotive market. The proposed acquisition of this fast-growing business accelerates our automotive market entry and secures a significant foothold for Openpay in the UK. Material growth synergies exist between Openpay and Payment Assist.”

“We also have shared values and a common vision to become the leading BNPS provider in our verticals, globally. We want to be a responsible provider of alternative payment and credit solutions to our customers – importantly, it’s a core tenet of our strategy to embrace regulation in all of its forms. With this proposed acquisition, Openpay joins with a business that is already embracing UK Financial Conduct Authority regulation and brings a responsible approach to its customers and merchants. I look forward to welcoming Payment Assist into the Openpay family.”

Payment Assist’s Managing Director, Neil Jeffery, added: “By teaming up, Payment Assist and Openpay bring combined expertise and market knowledge which is unrivalled in the UK automotive industry. We are delighted to be joining with Openpay and look forward to the benefits we can bring to merchants and customers.”

The Openpay share price is down 70% from its 52-week high.

The post Openpay (ASX:OPY) share price shoots higher on UK acquisition appeared first on The Motley Fool Australia.

More reading

• Here are 3 ASX shares with high debt levels
• The Zip (ASX:Z1P) share price slides 12% in May despite global expansion

James Mickleboro does not own any shares 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/2TV6vJX