Lepidico Ltd.'s board has unanimously recommended that shareholders reject the takeover offer from Lithium Australia NL and said the merger "makes no strategic sense and may lead to a significant deterioration" in the company's value.
Lithium Australia offered one of its own shares for every 13.25 shares in Lepidico for a total value of A$23.8 million, an offer that was previously termed "highly opportunistic" by Lepidico.
According to a March 28 statement, an independent expert hired by Lepidico to review the offer concluded that the offer is "neither fair nor reasonable."
The independent expert assessed the company's fair value at between 1.6 Australian cents per share and 2.1 cents per share and the value of 13.25 Lepidico shares to be between 21.2 cents and 27.8 cents.
The company noted that Lithium Australia's share price stood at 13.5 cents each at end of trade March 24.
Earlier this month, Lithium Australia accused Lepidico of trying to discredit the company's Sileach lithium processing technology.