TECPETROL ANNOUNCES PREMIUM ALL-CASH PROPOSAL TO ACQUIRE ALPHA LITHIUM CORPORATION
Proposal Represents Immediate, Cash Premium of 26% over Alpha’s 20-day Volume-Weighted Average Price as of May 12, 2023
Opportunity for Alpha Shareholders to Realize Compelling, Immediate and Certain Value –
No Financing Contingency and Credible Transaction Partner with a Clear Path Towards Obtaining Any Regulatory Approvals
Public Proposal Follows Attempts to Engage with Alpha in Private
Tecpetrol’s Intention is to Responsibly Develop These Premium Lithium Assets as part of the Integrated Western Battery Supply Chain
May 22, 2023 – Tecpetrol Investments S.L. (“Tecpetrol”), a member of the Techint Group (the “Techint Group”), announced today that it has made a non-binding proposal (the “Offer”) to acquire all of the issued and outstanding common shares (“Shares”) of Alpha Lithium Corporation (NEO: ALLI) (OTC: APHLF) (German WKN: A3CUW1) (“Alpha” or the “Company”) a Canadian incorporated, headquartered and listed company, for cash consideration of C$1.24 per Share (the “Offer Price”). The Offer was presented in a letter that Tecpetrol submitted to the president and chief executive officer of Alpha on May 15, 2023.
Alpha refused to consider Tecpetrol’s proposal and did not engage with Tecpetrol following discussions between advisors. Through these exchanges, Tecpetrol indicated an ability to improve the financial terms of its Offer if Alpha would agree to give Tecpetrol access to expedited due diligence so that Tecpetrol could determine an appropriate increase in price based on its findings. Tecpetrol remains prepared to engage immediately in good faith negotiations with Alpha, improve the Offer based on due diligence, and complete the transaction expeditiously with support from Alpha’s board of directors.
Tecpetrol’s intention, in line with its energy transition strategy, is to sustainably develop these premium lithium assets as part of the integrated Western battery supply chain. 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 the domestic and global value chains for the green and digital economy.
Tecpetrol is a company incorporated in Spain that is part of the Techint Group, a conglomerate with a strong presence in Canada for more than 20 years, notably through Tenaris, the leading Canadian manufacturer and supplier of steel tubes for the Canadian oil and gas industry. Tecpetrol is fully committed to this opportunity and has put in place a comprehensive and highly experienced team to facilitate the execution of the transaction described above on an expedited basis.
Financial and Strategic Benefits of the Offer
Tecpetrol firmly believes that the Offer is in the best interests of Alpha shareholders and that shareholders should have the opportunity to determine what is best for their investment. Tecpetrol believes the significant benefits of the Offer include, among other things:
- Attractive Premium to Shareholders. The Offer implies an aggregate purchase price of approximately C$241 million for the Company (on a fully-diluted, in-the-money basis) and represents the following premiums to the trading price of the Shares on the NEO Exchange for the period ending May 12, 2023:
- 26% premium to the 20-day volume weighted average price; and
- 13% premium to the closing price.
- Credible and Experienced Counterparty with Clear Path to Closing. The Techint Group is a large global industrial organization and has an extensive track record and reputation of completing large transactions in industrial and extractive sectors around the globe, including in Canada, and in navigating complex regulatory frameworks. The Techint Group’s strong integration in the western allied countries’ supply chains and significant presence and history of successful investment in Canada make it a credible transaction partner with a clear path towards obtaining any Canadian or other regulatory approvals and ultimately closing.
- Certainty of Value and Liquidity Through De-Risked Transaction. The Offer will crystallize full value for the Company’s shareholders, providing them with immediate liquidity, and eliminates the exploration, development and execution risk associated with bringing the Company’s properties into production.
- Standalone Plan Remains Challenging and Underfunded. The development of the Company’s assets requires financing to fund a significant capital program (further diluting the Company’s existing shareholders), and necessitates technical expertise given the development and execution risk.
- Tax-Efficient Structure. Tecpetrol is contemplating an acquisition of the Shares of the Company, which provides a tax-efficient structure for the disposition of the Shares by shareholders.
- No Financing Condition. Tecpetrol has the financial resources necessary to satisfy the Offer in full with cash on hand and does not require external financing.
BMO Capital Markets is serving as financial advisor and Davies Ward Phillips & Vineberg LLP is serving as legal advisor to Tecpetrol. In addition, Crestview Strategy is serving as government relations advisor and Teneo is serving as strategic communications advisor.
About the Tecpetrol Energy Transition Unit
Tecpetrol’s Energy Transition Unit is Techint Group’s dedicated business unit responsible for advancing its position in the global energy transition through investments in decarbonized energy sources, carriers and technologies, with the objective of contributing to a significant reduction in the carbon footprint. As part of this initiative through its subsidiary Techenergy Lithium S.A., Tecpetrol has built a lithium processing pilot plant in northern Argentina engineered for scale, which supports a production flowsheet involving direct lithium extraction. For additional information on Tecpetrol, please visit its website at https://www.tecpetrol.com/en
The Techint Group is a global conglomerate with diversified business lines in steelmaking, complex infrastructure construction, design and construction of industrial plans and machinery, technologies for the metals and mining industries, oil and gas exploration and production and research-oriented health facilities. Through our six main companies – Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN), Ternium S.A. (NYSE: TX), Techint Engineering & Construction, Tenova, Tecpetrol and Humanitas – the Techint Group operates on six continents, employs 79,300 employees and generates over US$33 billion in annual revenue. We have an extensive track record of completing large transactions in industrial and extractive sectors around the globe, including in Canada, and in navigating complex regulatory frameworks. For additional information on the Techint Group, please visit its website at https://www.techintgroup.com/en
Caution Regarding Forward-Looking Statements
This news release may contain forward-looking information within the meaning of Canadian provincial securities laws. The words “will”, “may”, “should”, “believe”, “expect” and derivatives thereof and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters, identify the above mentioned and other forward-looking statements. Forward-looking statements in this news release include: statements regarding Tecpetrol’s intention to complete the transactions contemplated by the Offer; the proposed terms and conditions of the Offer, including the amount and form of consideration under the Offer; the benefits of the Offer to Alpha shareholders, including the crystallization of full value, immediate liquidity and the elimination of the exploration, development and execution risk; the tax benefits of the Offer compared to other transactions; the expected conditions to completion of the Offer; the expected timing of the Offer; the clear path towards obtaining regulatory approvals and closing of the Offer; Tecpetrol’s intentions regarding the funding of the Offer; Tecpetrol’s intention to sustainably develop Alpha’s premium lithium assets as part of the integrated Western battery supply chain; and potential further engagement between Tecpetrol and the Company, including possibly varying the terms or conditions of the Offer.
Although Tecpetrol believes that these forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on them, or any other forward-looking statements or information in this news release. The actual outcome of future events could differ from the forward-looking statements and information herein, which are subject to a number of known and unknown risks and uncertainties. Factors that could cause actual events to differ materially from those contemplated or implied by the statements in this news release include: the ability to obtain regulatory clearances (including clearances from regulators, to the extent applicable, in Argentina and Canada) and meet other closing conditions to any possible transaction; the ability to realize financial, operational and other benefits from the proposed transaction; general economic conditions in the jurisdictions in which Tecpetrol and the Company operate and elsewhere which may impact the markets for our products and services; the impact of market conditions on our businesses; the ability to effectively complete transactions in the critical minerals space and to integrate acquisitions into existing operations; changes in technology which have the potential to disrupt the business and industries in which we operate; and the market conditions of key commodities, the price, supply or demand for which can have a significant impact upon the financial and operating performance of our business. Except as required by law, Tecpetrol undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.
THIS NEWS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO BUY OR SELL, OR A SOLICITATION OF AN OFFER TO SELL OR BUY, ANY SECURITIES. ANY OFFERS, SOLICITATIONS OR OFFERS TO BUY, OR ANY SALES OF SECURITIES WILL BE MADE IN ACCORDANCE WITH REGISTRATION AND OTHER REQUIREMENTS UNDER APPLICABLE LAW.