Shareholders take Arcadium Lithium to court claiming negligence in Rio Tinto mega deal

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Shareholders take Arcadium Lithium to court claiming negligence in Rio Tinto mega deal

The board of Arcadium Lithium is being sued for negligence in connection to a $10 billion Rio Tinto takeover a week before shareholders are due to vote on the transaction.

The New York and *********** Securities Exchange-listed company said in statements to both markets that its board has been hit with lawsuits from three shareholders in New York and Suffolk County courts, but argues they are without merit.

Rio and the US lithium chemicals company shook hands on an $US5.85 per share, all cash deal in October with prices for the battery metal struggling amid slower-than-hoped electric vehicle uptake.

The offer was a massive 90 per cent premium on Arcadium’s trading price at the time, and priced the target— formed through the merger of Allkem and Livent in January — at just shy of $10 billion.

In its statement, Arcadium says the complaints include allegations of negligent misrepresentation, concealment and negligence regarding the blockbuster deal, and that it has also been hit with 19 demand letters that make similar accusations.

A shareholder vote on the deal is due on December 23rd. It’s been suggested shareholders are broadly supportive of the deal, which would be Rio’s largest since 2007 and thrust the global miner to become one of the biggest lithium players in the world.

Arcadium’s flagship lithium brine operations are in Argentina near Rio’s own Rincon brine operations which is poised for maiden production by the end of this year.

The lithium carbonate made by Arcadium in Argentina is converted into battery-grade lithium at processing plants in Japan, China and North America.

Rio will also take control of the Mt Cattlin mine in Western Australia. The operation is under care and maintenance amid low prices.

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