Street Talk Mincor Resources tried and missed Western AreasAnthony Macdonald, Sarah Thompson and Kanika SoodFeb 8, 2022 – 9.33pm
Perth’s Mincor Resources has been trying to get in on Western Australia’s nickel consolidation, lurking in the shadows at bigger neighbour Western Areas.A Mincor nickel project in Kambalda Western Australia. Erin JonassonStreet Talk understands Mincor Resources approached Western Areas with a scrip-based proposal to combine the two businesses late last year, trying to bust up the blooming romance between Western Areas and IGO Ltd.
Western Areas is said to have given it short shrift - perhaps deciding it would get a better offer from IGO, which sure enough lobbed an all-cash binding offer on December 16.So Mincor’s approach went nowhere - and it looks like its interest is very much consigned to history.
[There also would have been substantial concerns about Mincor scrip and its underlying assets among some of Western Areas’ shareholders, but that’s another matter].Mincor declined to comment.Still, it’s interesting to hear Mincor’s been active and trying to muscle its way in on some rivals it knows well.
The potential fly in the ointment at Western Areas now is mining billionaire Andrew Forrest, who has built a 9 per cent stake and was buying above IGO’s offer price.Forrest’s obviously got the means to try and buy Western Areas, but it’s doubtful that he has the appetite given the price tag of over $1 billion.
Funnily enough, he also has 15 per cent of Mincor via his Squadron Resources.Hoping for another bidThere’s connections everywhere between Mincor, Western Areas and IGO.Mincor is the smaller of the two nickel miners with an $830 million market capitalisation. It’s run by David Southam who crossed over from Western Areas, where he was an executive director.IGO is also sitting on Mincor’s register with a 7.2 per cent stake, making it the company’s third-largest shareholder.
That would have made a competing bid for Western Areas a bit icky, although as one analyst pointed out IGO doesn’t have a board seat at Mincor despite the shareholding.IGO already has Western Areas board’s nod and has staunchly resisted pressure to up its bid.
The shareholder vote is due in April.Still, with Western Areas shares above the $3.36 offer price, the market’s tipping someone’s got a higher offer. Nickel prices are also up about 18 per cent since IGO locked in the December 16 bid.
WSA Price at posting:
$3.47 Sentiment: Buy Disclosure: Held
