Ann: Intention to Make Takeover Bid, page-88

As the incumbent (cornerstone) holder with 20% Wyloo can absolutely block any other hostile bidders from achieving a full takeover (90% acceptance, 10% (min.) blocking holding required - check). Given the size of Wyloo's existing holding, the only possible alternative for another suitor with full takeover aspirations is to craft a competing bid that the Board finds friendly enough to sponsor in the form of a SOA.

A SOA only requires a 75% acceptance rate of holders that bother vote. <--- That's a key point because many retail holders will simply not vote, meaning those who do will effectively punch above the voting weight, including Wyloo! So, Wyloo's 20% (blocking vote) may very well be enough in it's own right to kill that takeover avenue before it gets off the ground, by virtue of the voting participation mathematics. The other thing with SOAs is they are binary by nature, meaning holders will vote on a full takeover outcome or nothing at all. It's an accept/reject proposition, with no scope for a partial outcome. Because of this binary nature and when weighed up with Wyloo's existing 20% any other potential suitor would very likely shy away from a SOA due to the high risk of failure.

This leaves a competing on-market hostile approach as the only potential pathway for any other suitor. BUT, any new entrant would first need to get comfortable with competing on-market for something less than a full takeover because that's effectively already been ruled out, given Wyloo's oversized blocking stake.

So, any new entrant would really need to get comfortable with the best-case prospect of, maybe, hopefully, achieving 50.1% acceptances to at least obtain control of the company, without full (100%) ownership. That's the best possible scenario that SHs can hope for that would give rise to any kind of bidding war. BUT you've gotta ask yourself who would be prepared to enter the fray at this juncture for, at best, control of the company, rather than full ownership?

IGO?
Possibly, but v.unlikely, imo. They're already "engaged to be engaged" with Wyloo re- the battery precursor plant they're currently jointly investigating. I can't see IGO competing toe-to-toe with their potentially betrothed. Besides, IGO has their foot on PAN (20%), courtesy of the WSA takeover, and also hold a large amount of ground surrounding PAN's Savannah project in the Kimberley.
(BTW, Kudos to Wyloo for the deft corporate maneuvering, at relatively small cost, in shoehorning itself into that potential battery precursor arrangement during IGO's WSA takeover.)

BHP?
A tougher call. Being the owner of the concentrator that MCR's ore feeds, NW would be hands-down the natural buyer on any other day. However, I reckon they'd be LOATHED at the prospect of starting a bidding process in which the best they could hope for was control only, rather than full ownership -- esp. with AF on the other side! AF!! (Oh to be a fly on the wall a NW HQ right now.) For me, it will come down to just how strategically important the feed from MCR is, indirectly, to NW's (BHP's) WA smelter ops. That said, BHP aren't stupid. They walked away from the tussle with AF at Noront (Canada) and there's little chance they'll be shoehorned into a situation they don't want to be here either, imo. For me, it's BHP as the only alternative bidder. Chance of happening: unknown.

The real head-scratcher for me has always been (i.e. long before today's bid) what AF hopes to achieve by claiming MCR (assuming he can) when MCR is still going to be beholden to NW for primary (concentator) processing of its ore, even after the offtake agreement expires. There's an argument to be made that he may be wanting to secure Ni units for when(?) the JV with IGO formalises to actually develop the battery precursor plant. That's understandable, but as I understand it, the mined raw ore would still need primary processing into concentrate first, before sending down to Kwinana to any new precursor plant (i.e. foreseeably bypassing the traditional (secondary) smelting process due to the different processing flowsheet for battery presursor). This circles us back to NW's concentrator at Kambalda and their v.likely insistence, imo, that they would only continue to process MCR's raw ore using their concentrator on the basis NW would continue have access to the concentrate to feed their smelter. Catch 22.

This is why the traditional model is for the miner to also own their concentrator. However, there's a special history around the very unusual ownership situation nowadays re- Ni mines in Kambalda (eg: MCR, et al) vs. the concentrator (NW/BHP)... very 'special'.

So, what's AF's end-game with MCR?
Build the company into something that can eventually justify the capex of its own concentrator in due course, eventually sticking it to BHP by starving them of the sweetish conc. feed for their larger WA ops? Okaaay. Maybeee.

A left-field alternative possibility it that this may have zilch to do with securing long-term Ni units (via MCR, at least). It might, just might, be a corporate greenmail gambit by AF's Wyloo crew (Luca et al) to flush out BHP (the natural buyer) and force their hand into a bidding war whereby Wyloo eventually agrees to sell its stake in MCR to BHP for some kind of yet-to-be-discovered concession from BHP. A risky strategy if you ask me and for that reason I would normally dismiss it. But I keep coming back to the simple question of what AF hopes to achieve in owning a Ni miner that doesn't have its own primary processing capacity.

The most plausible (ok, ok) least implausible scenario I can think of is the least AF-like: Hold MCR reasonably passively and continue the joined-at-the-hip offtake arrangement with NW for the long term. It's the basic vanilla "ride the long-term thematic" scenario. But that would involve AF doing basic vanilla... with BHP??!! (Head implodes.)

I've got no skin in this particular game, but I do find it fascinating. I do have a material holding elsewhere in the Oz Ni space, so there's a broader interest/relevance at play.

Wishing all MCR holders a decent-ish outcome. It's gonna irk the heck outta LTers who are more interested in riding the broad thematic, rather than having their lunches opportunistically cut by a corporate raider. I totally hear you.