Arena Minerals (AN.V) has reached an agreement with Lithium Americas (LAC, LAC.TO) whereby the latter will acquire all outstanding shares of Arena Minerals. Arena shareholders will receive 0.0226 shares of Lithium Americas for each of their Arena shares. Based on the value of the Lithium Americas shares the night before the announcement, the deal had a value of C$311M. The deal makes sense, as Lithium Americas is the other big player in the Pastos Grandes area, after it acquired Millennial Lithium.
Arena is still trading at a small discount to the offer. Considering Lithium Americas is currently trading (3:30 PM Eastern time) at C$25.63, the offered exchange ratio indicates the Arena shares should be trading at C$0.58 instead of C$0.54. Buying Arena stock at C$0.54 implies you are buying Lithium Americas at C$0.54 / 0.0226 = C$23.89 if the deal goes ahead so this could be an interesting option to arbitrage between both share prices.
Disclosure: The author has no position in either Arena Minerals or Lithium Americas. Please read our disclaimer.
