November 12, 2012 / 4:18 PM / 5 years ago

Talison Lithium shares climb as Chinese firm signals bid

* Tianqi ties up 15 percent stake in Talison

* Tianqi plans full bid worth more than C$6.50/share

* Talison in friendly deal with Rockwood

* Shares of Talison up 6.2 pct at C$6.85 on TSX

Nov 12 (Reuters) - Shares of Talison Lithium climbed more than 6 percent on Monday after China’s Chengdu Tianqi Industry Group Co (Tianqi) said it has tied up a 15 percent stake in the lithium producer and intends to make a takeover offer.

Talison is currently in a friendly deal with chemical producer Rockwood Holdings Inc that values the miner at C$724 million ($722.81 million), or C$6.50 per share.

Privately held Tianqi, which has not yet formalized its offer, said it intends to make a bid at a price higher than C$6.50 per share, sending shares of Talison up 40 Canadian cents to C$6.85 on the Toronto Stock Exchange on Monday morning.

The stock has gained more than 60 percent since Aug. 22, the day before the Rockwood deal became public.

Talison said it has not received a formal offer from Tianqi and continues to recommend that shareholders vote in favor of the Rockwood deal.

Demand for lithium batteries has risen in recent years on the surging market for smartphones, portable electronics, and hybrid and electric vehicles.

Talison, which owns the Greenbushes lithium project in Western Australia, produces hard rock lithium primarily for export to China.

Tianqi, a longtime Talison customer, is the world’s largest hard rock lithium converter and makes a variety of raw materials for the battery industry. ($1 = 1.0017 Canadian dollars) (Reporting by Julie Gordon in Toronto; editing by Matthew Lewis)

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