Shares of Talison Lithium Ltd TLH.TO dropped 6 percent on Wednesday after suitor Rockwood Holdings Inc said it was not interested in a bidding war, even as Talison indicated it plans to open talks with a rival bidder.
Rockwood ROC.N, a U.S.-based chemical producer, said late on Tuesday that Australian authorities had approved its C$724 million ($725.71 million) takeover of Perth-based, Toronto-listed Talison.
"With this approval, Rockwood has obtained all regulatory approvals," Chief Executive Seifi Ghasemi said in a statement. "Rockwood has no intention of engaging in a bidding process for the acquisition of Talison."
Talison said it would hold talks with Chengdu Tianqi Industry Group Co to determine if the Chinese company's C$7.15-a-share offer, which values Talison at C$806 million, represents a "superior proposal" to the Rockwood deal.
A "superior proposal" takes into account the monetary value of the offer, the likelihood of conditions being attached to a takeover, and the timing required to complete a deal.
Talison's board continues to back the Rockwood deal.
The miner's shares dropped 43 Canadian cents to C$6.69 Wednesday morning on the Toronto Stock Exchange, falling well below the Tianqi offer price but still above the C$6.50-a-share Rockwood offer.
Talison produces hard rock lithium at its Greenbushes lithium project in Western Australia, primarily for export to China. The company also owns the Salares 7 lithium brine project in northern Chile.
Lazard Ltd is advising Rockwood while Talison is advised by Macquarie Capital in Australia and Canada. Tianqi's financial adviser is RedBridge Grant Samuel.
(Reporting by Julie Gordon; Editing by Gerald E. McCormick and John Wallace)