Danielle Le Messurier: Gina Rinehart’s Hancock Prospecting must show its hand soon on Liontown Resources

19.99 per cent — the magic number at which Gina Rinehart will have to decide whether she goes the whole hog with a rival takeover bid for Liontown Resources or sits content with what would appear to be a formidable blocking stake. Odds are on the latter. Her Hancock Prospecting has been snapping up shares in the WA lithium play like they are going out of fashion in what would appear to be a tactic out of the playbook of Mineral Resources boss (and South West Creek joint venture partner) Chris Ellison, overtaking Tim Goyder as Liontown’s biggest shareholder on Friday. MinRes went on a share raid of lithium junior Essential Metals weeks ahead of a shareholder meeting to approve IGO and Tianqi’s 50¢-a-share takeover bid earlier this year, successfully using its 19.55 per cent stake to block the deal — another scheme of arrangement — without making its own play. Essential is now being acquired by Bill Beament’s Develop Global courtesy of Mr Ellison’s blessing. Albemarle’s $3-a-share bid for Liontown requires 75 per cent support to get the deal over the line. But Hancock, like MinRes, could thwart it with close to 20 per cent or potentially less, depending on how many shareholders turn up to vote and how much support it can secure. Chapter 6 of the Corporations Act prevents Mrs Rinehart from accumulating a stake greater than 20 per cent without launching a formal takeover offer. While a $6.6 billion bid isn’t an obstacle for Australia’s richest person, whose wealth has been estimated around $36b, Mrs Rinehart is believed to be more interested in working in partnership with other Liontown shareholders to deliver the massive Kathleen Valley project ahead of production starting in mid-2024. But who they are and what the ownership structure is, along with Mrs Rinehart’s master plan, remains to be seen. Having built a 16.7 per cent stake in Liontown as of Friday, and with Liontown and Albemarle possibly wrapping up due diligence next week, shareholders won’t be kept in the dark much longer. Hancock has signalled its interest in partnering on downstream processing opportunities, which could imply a deal with Albemarle, and has hinted it will use its enlarged stake to push for a seat on Liontown’s board. Goyder is a shrewd businessman but it is hard to see how Liontown and its suitor will be able to ignore Mrs Rinehart and proceed with the deal as planned. Oh to be a fly on the wall at those due diligence meetings.