Rio Tinto Taps Arcadium As Lithium Prices Sag

• Rio Tinto Ltd (RIO AU) has confirmed it has approached Arcadium Lithium (LTM AU)/(ALTM US) regarding a potential acquisition.

• No Offer Price has been announced; however a proposed bid with a 30%+ premium, on top of last week's 11% bounce, has been rumoured. That implies a price of ~$6/share.

• Given shares were trading ~A$10/share in January this year, one Aussie-based fund reckons such an Offer would be highly opportunistic; and that a bid 2.5-3x higher is reasonable.