Piedmont Lithium Stock Gets Retail Buzzing With Australian Miner Sayona’s Buyout Deal

Shares of Piedmont Lithium, Inc. ($PLL) climbed nearly 3% pre-market Tuesday, fueled by retail excitement over its definitive merger agreement with Sayona Mining ($SYAXF). 

The deal, which aims to create a global lithium leader, will make Sayona the ultimate parent entity, with shareholders of both companies holding approximately 50% of the merged company (MergeCo).

Key transaction details include:

• Piedmont will raise $27 million, while Sayona plans to raise A$40 million ($27 million) and an additional conditional A$69 million placement to Resource Capital Fund VIII post-merger.
• Shareholders of Piedmont will receive 527 Sayona ordinary shares per PLL share or 5.27 Sayona shares per Piedmont CDI.
• The merged entity will have headquarters in Brisbane, Australia, with offices in North Carolina and Quebec, and plans to rebrand post-merger.
• Sayona CEO Lucas Dow will lead MergeCo, while Piedmont CEO Keith Phillips will serve as a strategic advisor during the transition.

The companies’ Quebec-based joint venture, North American Lithium (NAL), recently completed a ramp-up and is targeting 226,000 metric tons of spodumene concentrate annually. 

NAL reportedly posted losses in the September quarter, reflecting challenges in a lithium market grappling with oversupply and slower-than-expected EV adoption.

PLL sentiment and message volume on Nov 19 as of 7:20 am ET | source: Stocktwits

Retail sentiment for PLL surged to ‘extremely bullish’ on Stocktwits, where the ticker was among the top 20 trending symbols before the bell, with message volume jumping.

Under the all-stock deal, Sayona is offering a 6% premium based on Monday’s closing prices. 

Following the merger and capital raisings, the combined entity is expected to have a pro-forma market capitalization of $623 million, according to Reuters.

“[The merged company] will be North America’s largest lithium producer with an attractive growth profile,” said Piedmont CEO Keith Phillips.

“The merger financing, corner-stoned by leading mining private equity group RCF, will enable us to weather the current industry downturn while making intelligent investments in our growth projects to be positioned for the recovery in lithium markets that we expect in the medium-term,” he added.

The transaction requires shareholder approvals and is expected to close in the first half of 2025. 

If completed, the merger will represent a major step in the ongoing consolidation of the struggling lithium sector, following Rio Tinto’s recent $6.7 billion bid for Arcadium Lithium ($ALTM).

PLL has struggled in 2024, with its stock down nearly 56% year-to-date.