Highly secure cash payment to Alpha shareholders who would otherwise be exposed to risk as owners of an early-stage lithium exploration company
Tecpetrol is a credible party to the transaction with a clear path to closing
The offer provides shareholders the opportunity to determine the outcome of their investment following Alpha’s unwillingness to participate
Tecpetrol prepares to increase the offer price if it shows greater value through commitment
Tecpetrol’s intention is to responsibly develop Alpha’s lithium assets as part of the integrated Western battery supply chain
TORONTO, June 5, 2023/PRNewswire/ — Inversiones Tecpetrol S.L. (“Tecpetrol”), a member of the Techint Group, today announced that it intends to make a formal offer (the “Offer”) to acquire all of the issued and outstanding common shares (the “Shares”) of Alpha Lithium Corporation (NEO: ALLI) (OTC: APHLF) (German WKN: A3CUW1) (“Alpha” or the “Company”), a Canadian publicly traded, headquartered, and incorporated company, for cash consideration of 1.24 Canadian dollars per share (the “offer price”). Tecpetrol intends to make the offer directly to Alpha’s shareholders so that they can determine the outcome of their investment.
The offer follows repeated attempts by Tecpetrol to engage constructively with Alpha. More recently, Tecpetrol suggested that the parties enter into confidential negotiations regarding the value of the company to determine if a mutually agreed transaction price could be presented to Alpha’s shareholders for their consideration. Tecpetrol reiterated to Alpha that it had the ability to increase the value of its proposal if the parties could reach an agreement on a mutually acceptable transaction price. To facilitate these negotiations, Tecpetrol waived its previous due diligence and exclusivity requests. Despite the waiver of the due diligence request, which eliminated the need for a non-disclosure agreement, Alpha has continued to insist that Tecpetrol execute a comprehensive non-disclosure agreement that would prevent Tecpetrol from making an offer directly to shareholders and would limit inappropriately Tecpetrol’s strategic options, depriving shareholders of the opportunity to choose to accept or reject the offer.
Tecpetrol is a company incorporated in Spain that is part of Grupo Techint, a conglomerate with a strong presence in Canada for more than 20 years, in particular through Tenaris, the main Canadian manufacturer and supplier of steel tubes for the Canadian industry. of oil and gas. Tecpetrol’s intention, in line with its energy transition strategy, is to responsibly develop these premium lithium assets as part of the integrated supply chain of Western batteries. The proposal is aligned with Canada’s critical minerals strategy, whose vision is to increase the supply of critical minerals and support the development of national and global value chains for the green and digital economy.
Financial and strategic benefits of the offer
Tecpetrol firmly believes that shareholders should have the opportunity to determine what is best for their investment by accepting compelling, immediate and secure value in the form of CAD$1.24 cash per share from a credible transaction partner with a path Clear towards closing. Tecpetrol believes that if the company were to pursue an asset-level transaction (see “offering background” below), shareholders could be deprived of that opportunity.
Tecpetrol believes that the significant benefits of the offer include, among others:
The offering also provides immediate liquidity to holders of a rarely traded investment in an early-stage lithium exploration company, in a risk-free transaction that eliminates exploration, development and execution risk associated with bringing lithium properties online. Alpha.
Background to the offer
Since its creation, Tecpetrol’s energy transition unit has continually evaluated potential investment, acquisition and other business opportunities in energy assets in Argentina and elsewhere that, in line with its energy transition strategy, can be responsibly developed as part of the integrated supply chain of western batteries. Tecpetrol recognizes that a key component to building an emerging Western battery supply chain is the supply of lithium, and Tecpetrol believes that its energy transition strategy is aligned with Western efforts to secure this supply, including the Government’s critical minerals policy. from Canada.
On December 1, 2022, Tecpetrol received an unsolicited invitation to participate in an auction process for the sale of Alpha’s interest in the Tolillar Project (the “sale process”). Tecpetrol understood that the sale process would be broad in nature and would include participants from various countries, including China. Tecpetrol also understood that the sale process was focused on the sale of an interest in the Tolillar Project, rather than a corporate-level transaction involving Alpha, and would potentially allow participation in the sale process of parties likely to face a significant scrutiny under the national security provisions of the Canada Investments Act and the Critical Minerals Policy.
At that time, Tecpetrol expressed its willingness to participate in the sale process, as well as its willingness to explore a possible corporate-level transaction that Alpha shareholders might find more attractive than the asset-level structure proposed in the sale process. . In Tecpetrol’s view, since the Tolillar Project is Alpha’s only significant mineral property and represents substantially all of its assets, a corporate-level transaction would not only provide shareholders with the opportunity to determine what is best for their investment , but it would also give them the opportunity to dispose of their full interest in Alpha and receive the full value of their Shares. In addition, based on the information available to Tecpetrol and its advisors, a transaction at the corporate level would generally be more tax efficient for shareholders than a distribution to shareholders of the proceeds resulting from a transaction at the asset level, the amount and timing of which distribution is at the discretion of Alpha’s board of directors.
However, company representatives informed Tecpetrol that Alpha would not consider a transaction at the corporate level. Tecpetrol interpreted this response to indicate that, by exclusively seeking an asset-level structure, Alpha was prioritizing parties other than Tecpetrol with its Sale process, which Tecpetrol believed were likely to be parties that would face significant scrutiny under the Investment Law. from Canada. As a result, Tecpetrol declined to participate in the sale process, but between December 2022 and April 2023 continued to monitor the situation, conducting its due diligence of Alpha and the Tolillar Project based on publicly available information, and advancing its evaluation. of a possible transaction.
As of May 2023, Tecpetrol had completed its public information due diligence. On May 15, 2023, Tecpetrol submitted to Alpha a non-binding proposal (the “Initial Proposal”) to acquire all of the issued and outstanding Shares for a purchase price of C$1.24 per share. Tecpetrol also offered Alpha the opportunity to discuss the Initial proposal in further detail.
On May 16, 2023, Alpha informed Tecpetrol that its board of directors was not willing to consider the Initial proposal or enter into discussions with Tecpetrol. In addition, Tecpetrol’s financial advisor spoke with Alpha’s financial advisor to, among other things, emphasize Tecpetrol’s position as a credible and experienced counterparty with a clear path to closing and Tecpetrol’s willingness to increase the proposed purchase price. in the Initial proposal if they were granted due diligence access. Tecpetrol’s financial advisor also requested guidance on the extent of the offer price improvement that would be necessary to gain Alpha’s board support, but no such guidance was provided.
In view of Alpha’s refusal to consider the Initial Proposal or enter into discussions with Tecpetrol, Tecpetrol considered that shareholders should be aware of the Initial Proposal and, on May 22, 2023, issued a press release disclosing the key terms of the Proposal. initial.
On May 31, 2023, Tecpetrol’s financial advisor contacted Alpha’s financial advisor again to communicate Tecpetrol’s willingness to waive its prior due diligence access and exclusivity requests and provide Alpha with the opportunity to directly participate in discussions regarding the value of the company with a view to increasing the offer price after negotiations.
On June 1, 2023, Tecpetrol’s financial advisor contacted Alpha’s financial advisor to propose specific steps for a confidential exchange of information on the value for which each party would support a potential transaction. Following that update, despite the fact that Tecpetrol had waived its due diligence request, which eliminated the need for a non-disclosure agreement, Alpha insisted that Tecpetrol enter into a comprehensive non-disclosure agreement in the form prepared by Alpha that would prevent would cause Tecpetrol to make an offer directly to shareholders and would unduly limit Tecpetrol’s strategic options, depriving shareholders of the opportunity to choose to accept or reject the offer.
Tecpetrol is not willing to accept these inappropriate conditions. Accordingly, in light of Alpha’s repeated refusal to enter into constructive discussions with Tecpetrol to increase the offer price, Tecpetrol intends to proceed directly with the offer to Alpha’s shareholders.
Offer details
Full details of the offer, which will be formally made by a Canadian wholly-owned subsidiary of Tecpetrol, will be provided in a formal and circular offer of tender offer, letter of transmission and notice of guaranteed delivery (collectively, the “Opening Documents”). the Offering”) to be filed with Canadian Securities Regulatory Authorities and mailed to Alpha shareholders. Tecpetrol will request a list of Alpha’s security holders and expects to mail the Offering Documents as soon as possible after receiving such list. The offer will be open for acceptance for a period of 105 days after formal commencement, unless the offer is extended, accelerated, or withdrawn in accordance with its terms, and will constitute a “permitted offer” for the purposes of the rights plan. Alpha shareholders. The shareholder rights plan has not been approved or ratified by the shareholders.
The offer will be conditioned on the fulfillment of certain conditions or, where permitted, on the waiver on or before the expiration of the offer. Said conditions will include, among others that will be detailed in the formal and circular offer of takeover bid: (a) having been validly deposited by virtue of the offer and that number of shares representing more than 50% of the outstanding shares, excluding those shares of real ownership, or over which control or management is exercised, by Tecpetrol or by any Person acting jointly or in concert with Tecpetrol, which is an inalienable statutory condition; (b) having been validly deposited pursuant to the offer and not withdrawn such number of shares (together with the associated rights under Alpha’s shareholder rights plan) representing at the expiration of the offer at least two-thirds of the shares outstanding on a wholly-dilute basis; (c) Tecpetrol having determined that no material adverse effect has occurred with respect to Alpha; and (d) Tecpetrol having determined that Alpha has not taken any action or disclosed that it intends to take any action that would make it inadvisable for Tecpetrol to proceed with the offer, such as entering into any definitive agreement or transaction under or in connection with with the sales process. The offer is not subject to any due diligence or access condition, financing condition or approval condition of Tecpetrol’s shareholders. In addition, to the best of Tecpetrol’s knowledge, no regulatory approvals are required in connection with the offer.
If the legal minimum is met and the other conditions of the offer are met or waived on or before the expiration of the offer, such that Tecpetrol takes the shares validly deposited under the offer, it will make a public announcement of the foregoing and will extend the period during which the shares can be deposited and offered to the offer for a period of not less than 10 business days after the date of said announcement.
Upon completion of the Offer, Tecpetrol intends (but is not obligated) to enter into one or more transactions that will enable it to acquire all shares not acquired under the Offer, including a compulsory acquisition or subsequent acquisition transaction. If Tecpetrol is able to complete such a transaction, Tecpetrol intends to seek to delist the shares of the NEO and render Alpha no longer a reporting issuer if permitted by applicable law.
Full details of the offer will be provided in the Offer Documents to be filed with the Canadian Securities Regulatory Authorities and mailed to Alpha shareholders. This press release does not replace the Offer Documents. The Offer Documents are not currently available, but once available they will contain important information related to the offer, Tecpetrol and Alpha and should be reviewed carefully.
Shareholders should consult their own tax advisers taking into account their own particular circumstances to determine the particular tax consequences for them of a disposition of shares pursuant to the offer, a compulsory acquisition or a subsequent acquisition transaction.
Readers are cautioned that Tecpetrol may decide not to make or proceed with the offer and there can be no guarantee that the offer will be made or that the final terms of the offer will be as described in this press release.
advisors
BMO Capital Markets is acting as financial advisor and Davies Ward Phillips
About the Tecpetrol Energy Transition Unit
The Tecpetrol Energy Transition Unit is the dedicated business unit of the Techint Group responsible for advancing its positioning in the global energy transition through investments in energy sources, carriers and decarbonized technologies, with the aim of contributing to a significant reduction of the carbon footprint. As part of this initiative through its subsidiary Techenergy Lithium S.A., Tecpetrol has built a pilot lithium processing plant in northern Argentina designed to scale, supporting a production flowsheet involving direct lithium extraction. For additional information on Tecpetrol, please visit their website at https://www.tecpetrol.com/en
The Techint Group is a global conglomerate with diversified business lines in the steel industry, construction of complex infrastructure, design and construction of industrial plants and machinery, technologies for the metals and mining industries, oil and gas exploration and production, and health-oriented facilities. to the investigation. Through our six main companies – Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN), Ternium S.A. (NYSE: TX), Techint Engineering and Construction, Tenova, Tecpetrol and Humanitas – The Techint Group operates on six continents, employs 79,300 employees and generates more than US$33 billion in annual revenue. We have extensive track records of completing large transactions in industrial and extractive sectors around the world, including in Canada, and navigating complex regulatory frameworks. For additional information about the Techint Group, please visit their website at https://www.techintgroup.com/en
Caution Regarding Forward-Looking Statements
This press release contains “forward-looking information.” Forward-looking information is not based on historical facts, but on current expectations and projections about future events and, therefore, is subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by the information. prospective. Often, but not always, forward-looking information can be identified by the use of forward-looking words such as “plans”, “expects”, “intends”, “seeks”, “anticipates”, “believes” or variations of such words, phrases or statements that certain actions, events, or results “can,” “could,” “should,” “should,” “might,” or “will” be taken, occur, or achieved. Forward-looking information contained in this press release includes, but is not limited to, statements regarding Tecpetrol’s intention to make the offer and the proposed terms and conditions of the offer, including the offer price, the timing of the offer, the terms of the offer, the term of acceptance of the offer and other details of the offer; Tecpetrol’s intention to request a list of Alpha’s security holders and its expectation to mail the Offering Documents as soon as possible after receiving such list; information on Tecpetrol’s plans for Alpha if the offer is successful; compliance or waiver of the conditions to consummate the offer; offer benefits; expectations related to the sales process and its timing and the potential participants and potential structure of any transaction resulting from the sales process; anticipated regulatory considerations and other transaction risks applicable to any transaction resulting from the sale process, including with respect to the Investment Canada Act and critical minerals policy and any shareholder approval that may or may not be required or sought in relation to any transaction resulting from the sales process; the possibility of an alternative transaction resulting from the sale process and the probability that the share price will fall back to pre-offering levels if the offering is unsuccessful; the tax treatment of the shareholder offering, including the tax efficiency of a stock acquisition in connection with an asset-level transaction related to the Tolillar Project followed by a distribution of proceeds therefrom to shareholders; intentions to delist the shares and have Alpha cease to be a reporting issuer if permitted by applicable law; expectations regarding Alpha’s standalone plan and the financing and capital program required to execute such plan; and carrying out a compulsory acquisition or subsequent acquisition operation.
Although Tecpetrol believes that the expectations reflected in such forward-looking information are reasonable, such statements involve risks and uncertainties and have been based on information and assumptions that may be inaccurate, and such statements should not be relied upon. Certain material factors or assumptions apply when making forward-looking information and such factors and assumptions are based on information currently available to Tecpetrol, and actual results may differ materially from those expressed or implied by such statements. In addition, the information used in the development of forward-looking information has been obtained from various sources, including third parties and regulatory or governmental authorities. Important factors that could cause Tecpetrol’s actual results, performance or achievements or the completion of the Offer to differ materially from any future results, performance or achievements expressed or implied by such forward-looking information include, among others: the final result of any potential transaction between Tecpetrol and Alpha, including whether or not Alpha will agree to a transaction with Tecpetrol; actions taken by Alpha; actions taken by Alpha’s security holders in connection with the offering; that the offeror is unable to meet or waive the conditions of the offer by the expiration of the offer period; the result of the sales process; that any transaction resulting from the sale process involving a state-owned company or foreign-influenced private investor will be subject to certain Canadian regulatory approvals and the outcome of such regulatory approval process; that none of the offering, any mandatory acquisition or subsequent acquisition transaction is subject to regulatory approvals and the ability to obtain regulatory approvals (if applicable) and meet other closing conditions for any potential transaction, including necessary shareholder approvals; any changes in general economic, market, and/or industry-specific conditions, including interest rates, currency exchange rates, or commodity prices; industry risk; Alpha’s structure and its tax characteristics; and that there are no material inaccuracies or omissions in Alpha’s publicly available information.
The forward-looking information in this press release is based on Tecpetrol’s beliefs and opinions at the time the information is provided, and this forward-looking information should not be expected to be updated or supplemented as a result of new information, estimates or opinions, events or future or other results, and Tecpetrol expressly disclaims any obligation to do so, except as required by applicable law.
Disclaimer
This press release is for informational purposes only and does not constitute an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities. The offer will be made only through, and subject to the terms and conditions established in, the formal offer and the circular of public offer of acquisition, the letter of transmission and the notice of guaranteed delivery. No offer will be made or deposits accepted from or on behalf of shareholders in any jurisdiction where the making or acceptance of the offer would not be in accordance with the laws of such jurisdiction.
The offer will be made for the securities of a Canadian company that does not have securities registered under section 12 of the United States Securities Exchange Act of 1934, as amended (the “United States Securities Exchange Act”). Accordingly, the offer is not subject to section 14(d) of the United States Securities Exchange Act or Regulation 14D or Regulation 14E Rule 14e-1. The offering will be made in the United States with respect to securities of a “foreign private issuer,” as such term is defined in Rule 3b-4 of the United States Securities Exchange Act, in accordance with the requirements of foreign exchange law. securities and companies of Canada. US shareholders should be aware that these requirements are different from US requirements applicable to takeover bids under the US Securities Exchange Act and the rules and regulations promulgated thereunder.
The offer and all agreements resulting from acceptance thereof shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. Accordingly, the provisions of the German Procurement Code (Wertpapiererwerbs- und Übernahmegesetz) do not apply to the offer.
Neither the United States Securities and Exchange Commission, any United States state securities commission, nor the German Federal Supervisory Authority has approved or disapproved (or will approve or disapprove) the offer, nor has it approved (or will approve) any comments on the offer. fairness or the merits of the offer or about the adequacy or completeness of the information contained in this press release or in any other document related to the offer. Any statement to the contrary is unlawful.
Contact: Alexandre Meterissian, E-mail: Alexandre.meterissian@teneo.com; Investor Relations, Jorge Dimópulos, E-mail: Jorge.dimopulos@tecpetrol.com
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