3 Votes and 1 Ratio Decide European Lithium’s CRML Merger

European Lithium Limited (ASX:EUR, FRA:PF8, OTC:EULIF) has cleared the first court hurdle in its proposed merger with NASDAQ-listed Critical Metals Corp. (NASDAQ:CRML), but the transaction will now go to investors with an unusually important qualification: the independent expert says the Share Scheme is not fair.

The Supreme Court of Western Australia on 15 September ordered EUR to convene meetings of shareholders and listed optionholders to vote on the proposed acquisition of all issued EUR shares and options by CRML. Consideration would be paid in new CRML shares, with the number issued for each EUR share determined under the Scheme Booklet.

Independent expert flags share valuation gap

Horizon Nexus Partners Securities concluded that the Share Scheme is “not fair but reasonable” and remains in the best interests of EUR shareholders in the absence of a superior proposal. The distinction matters: the expert’s conclusion does not say the exchange is fair on value, but it does support proceeding with the transaction under the stated conditions.

For EUR optionholders, the assessment is more straightforward. The expert found the Option Scheme fair and reasonable and in their best interests, again assuming no superior proposal emerges. The full valuation reasoning, along with details of certain personal benefits to independent director Michael Carter, will be set out in the Scheme Booklet.

Three votes stand between EUR and CRML

EUR shareholders must first vote on related-party resolutions at a general meeting, immediately before the scheme meetings. They will then vote on the Share Scheme, while optionholders will separately vote on the Option Scheme. Implementation of either scheme is conditional on the relevant approvals, the related-party resolutions, further court approval and the satisfaction or waiver of other conditions.

The independent board committee, comprising Carter as the only EUR director independent of CRML, recommends that securityholders vote in favour of their relevant scheme, subject to the expert maintaining its best-interests conclusion and no superior proposal emerging. Directors who also serve on the CRML board have not made a recommendation or voting intention statement, leaving the committee’s recommendation to be weighed alongside the disclosed personal benefits.

Exchange ratio arrives before the vote

The key economic figure is still to come. The Share Scheme Transaction Ratio will be calculated using CRML’s volume-weighted average price through 20 October and announced to ASX at 9:00am AWST on 21 October, one day before the meetings. That timing gives shareholders a final piece of consideration information after proxy deadlines have passed, although the announcement says proxies can be revoked before a meeting or replaced by an in-person vote.

The meetings are scheduled for 22 October. If the required majorities are secured, EUR is due to return to court on 26 October, with the scheme targeted to become effective on 27 October and consideration issued on 5 November. New CRML shares are expected to begin trading on NASDAQ on 6 November, subject to the remaining approvals and conditions.