Talison Lithium said on Friday its Chinese suitor, Chengdu Tianqi Industry Group, has secured Australian regulatory approval for its proposed takeover of Talison, sending shares of the lithium producer up more than 2%.

The nod from Australian regulators comes just two days after rival suitor Rockwood Holdings said it was not interested in a bidding war. Talison adjourned a meeting to vote on Rockwood's offer until Dec. 13.

Perth, Australia-based, Toronto-listed Talison said it was continuing talks with China's Tianqi on its C$7.15-a-share offer, which values the company at C$806 million ($807.57 million).

That offer is 65 Canadian cents higher than U.S.-based chemical producer Rockwood's C$6.50 per share bid, which values Talison at C$724 million and was approved by Australian regulators earlier this week.

Talison's board will now need to determine if the Chinese offer is a "superior proposal" to its friendly deal with Rockwood, taking into account the monetary value of the offer, the likelihood of conditions being attached, and the timing required to complete a deal.

With a far higher bid price and no objections from Australia's Foreign Investment Review Board (FIRB), things are looking positive for Tianqi, said Jonathan Lee, an analyst at Byron Capital Markets.

"We thought the biggest hurdle was going to be the FIRB approval, so to some extent that approval has greatly increased the chance of the Talison board accepting Tianqi's offer," he said.

Tianqi holds a 15% stake in Talison and now that the foreign investment hurdles have been cleared, it will settle on an extra 5.7 million shares, boosting its stake to 20 percent.

Shares of Talison rose 19 Canadian cents to close at C$6.97 on Friday on the Toronto Stock Exchange, but the stock remained below the Chinese company's offer.

"It could be that people still think there is some risk in the story," said Lee, noting that a Tianqi takeover could take three to six months to close, making timing an issue.

Any takeover of Talison will also face a review by Investment Canada, though the deal is unlikely to be opposed as the company does not have mining assets inside Canada.

Talison is the world's largest pure-play lithium producer.

The miner recently completed an expansion at its flagship project in Australia and now has the capacity to produce nearly two-thirds of current global demand for lithium carbonate, which is used in smartphone and hybrid car batteries. The company also owns a development-stage project in northern Chile.