Prior to the IGO news surfacing, I was bullish nickel, but long CTM and BSX. However I quickly realised WSA was very strategic and thus highly likely to be the subject of a bidding war. I moved quickly and grabbed a good chunk at 2.80. This article should be of interest to all:
Forrest declares nickel war on BHP
Brad ThompsonReporter
Updated Aug 20, 2021 – 2.29pm, first published at 12.54pm
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Andrew Forrest has declared his intention to battle BHP for nickel assets and is casting a big shadow over what could emerge as a bidding war for Western Areas that has
implications for BHP’s ambitions in battery metals.Forrest-owned Wyloo Metals said it opposed BHP’s takeover bid for Noront Resources in Canada and is willing become involved in a bidding war for the promising nickel producer.
And a day after IGO Limited confirmed it was in takeover talks with Western Areas, it was revealed Forrest-owned Wyloo Metals has accumulated a 5.28 per cent stake in Western Areas.
Andrew Forrest is set to have a say on nickel consolidation in WA. Rebecca Mansell
The stake, together with others in West Australian-based nickel players, means the iron ore billionaire will at least have a big say in any predicted consolidation in the sector.
The move makes the nickel-rich area of WA the second front on which Dr Forrest and BHP’s growing interests in the key battery metal may potentially clash. They are now in open warfare in Canada over Noront and control of projects in the mineral-rich Ring of Fire region in the James Bay Lowlands of Northern Ontario.
Breaking its silence on BHP trumping its bid for Noront with a $C325 million offer last month, Wyloo said it was willing to fight BHP for control.
“Noront’s Ring of Fire land package hosts some of the most prospective mineral deposits in the world,” Wyloo said.
“These deposits have the potential to become Canada’s next great mineral district, supporting the production of future-facing commodities for multiple generations.
“Wyloo Metals continues to firmly believe in the immense potential of the Ring of Fire and therefore does not intend to support or tender its Noront shares to BHP’s offer.“
Wyloo said it was disappointed that the Noront board did not seek to meaningfully engage or negotiate with it before accepting the BHP offer.
The Forrest entity camp said its cornerstone interest of in Noront amounted to 37.5 per cent on a partially diluted basis and BHP’s bid was unlikely to succeed without its support.
Wyloo claimed the Noront board was standing in the way of it making a superior takeover offer.
“Wyloo Metals would consider proposing a superior offer to acquire the outstanding common shares of Noront it does not already own, should it be provided with access to due diligence,” it said.
“Despite numerous attempts to date, the Noront board has denied Wyloo Metals from obtaining access to due diligence on reasonable terms for a shareholder with a cornerstone position.“
Wyloo said it was “unfortunate” that the total value of any superior offer it was contemplating would need to accommodate a $C13 million break fee payable to BHP, which “was agreed to by the Noront board to the direct detriment of Noront’s shareholders”.
Closer to his home in WA, Dr Forrest’s moves could also prompt a response from BHP given its relies on Western Areas, IGO and other smaller companies for a portion of the nickel it will need to supply Elon Musk’s Tesla and other car and battery-making customers through BHP Nickel West.
Wyloo, owned by Dr Forrest’s private investment company, Tattarang, has a 15 per cent stake in Mincor Resources, which is gearing up to produce 15,000 tonnes of nickel a year and supply BHP Nickel West.
Wyloo also owns shares in Panoramic Resources, a nickel player preparing to restart its Savannah operation in WA’s remote east Kimberley.
Run by Tattarang young gun Luca Giacovazzi, Wyloo has been accumulating shares in Western Areas since March, reaching the 5.23 per cent mark on Thursday as IGO and Western Areas confirmed takeover talks after being flushed out by an exclusive report in
The Australian Financial Review’s Street Talk column.
RELATEDNickel miner Western Areas powers up defence as suitor circles
RELATEDBHP beats Forrest in takeover battle for prized nickel projectAnalysts have said IGO, looking to shore up nickel production as its Nova mine comes to the end of its life, will need to fork out more than $1 billion to secure Western Areas.
Wyloo was a step ahead of BHP in Canada, where it took a substantial share in Noront and then launched a takeover bid. BHP reacted by trumping the Wyloo offer for Noront and its highly rated Eagle’s Nest nickel project.
The Western Areas share price has jumped from $2.47 on Wednesday to $2.95 in trading on Friday.
Brad Thompson writes across business and politics from Western Australia for The Australian Financial Review. Brad is based in our Perth bureau. Connect with Brad on
Twitter. Email Brad at
bradthompson@copyright link
