Piedmont Lithium Ltd to be Acquired by Sayona Mining Ltd

Investing.com — Piedmont Lithium Ltd (ASX:PLL), which supplies the battery-making metal to Tesla Inc (NASDAQ:TSLA), is set to be taken over by Australia’s Sayona Mining Ltd (ASX:SYA) in an all-stock deal, forming a major American lithium producer.

Shareholder Details

Piedmont’s U.S. shareholders will receive 527 of Sayona’s American depository shares (ADS) for each share in Piedmont, as stated in a recent announcement. Sayona’s ADSs currently trade in over-the-counter markets.

For Piedmont’s Australian shareholders, they will get 5.27 Sayona shares for each of their shares. Based on Sayona’s A$ close on Monday, this deal values Piedmont shares at A$0.20026 apiece, representing an 8% premium over Piedmont’s last traded price in Australia.

Structural Changes

Following the merger, Sayona will become the parent entity, which includes a primary listing in Australia and a secondary listing on the Nasdaq. Shareholders from both companies are expected to have approximately equal ownership in the newly formed entity.

Background Information

Piedmont has a five-year agreement with Tesla, supplying spodumene concentrate since 2020. However, the company faces challenges due to sluggish demand and an oversupply of lithium, particularly as the demand for electric vehicles has not met earlier expectations.