Shares of Arcadium Lithium (ALTM) are up 34% on media reports that mining giant Rio Tinto
(RIO) is preparing to make a takeover bid for the company.
The lithium producer’s stock had risen 10% on Oct. 4 on rumours that a takeover offer was imminent.
In Australian trading, Arcadium’s stock rose 46% on Oct. 7. Rio Tinto’s stock is down less than 1% and trading at $69.17 U.S. per share.
The trading activity comes after the two companies confirmed in separate statements over the weekend that they are in talks about a takeover of Arcadium.
However, each side stressed that no deal has been reached, and that there “is no certainty that any transaction will be agreed to or will proceed.”
Rio Tinto is trying to diversify beyond its production of iron ore, copper, and aluminum with an expansion into lithium.
Lithium is a primary component in electric vehicle (EV) batteries. However, its price has trended lower this year as demand for EVs has slumped.
Arcadium went public in January of this year, and since then its stock has declined 55%, sliding lower alongside lithium prices. The company’s shares are currently trading at $4.12 U.S. each.