It's been mentioned before on this thread and I very much agree. AF is the kingmaker who never held any grand outright ownership aspirations re- WSA, but who was rather interested in a ground-floor buy-in to IGO's future Ni sulphate processing plant -- where the real value-add will happen.
He paid a little over the IGO bid to secure a very important ~10% of WSA. Some might be thinking a traditional blocking stake, but this isn't relevant here. It's a Scheme of Implemtation, which requires 25% to block. Knowing that Perpetual already had ~15% and were receptive, AF and the crew at Wyloo were very shrewd to snap up Wyloo's ~10%, which made him one of two key voices that needed to be heard to ensure the deal wouldn't get blocked.
And the price for his support? 30% participation at ground-floor level of IGO's future Ni-based battery precursor plant. It matters not that AF doesn't have any feedstock. He doesn't need it. The processing plant will likely operate as a stand-alone JV entity that purchases it's inputs (Ni concentrate) from IGO (and anyone else if spare capacity for third party purchases is built-in initially or down the track). It's basically going to be a passive investment for Wyloo. IGO will be the senior partner and will run it in much the same way that AngloGold Ashanti (70%) ran the Tropicana Gold JV and IGO (30%) passively banked the divvies for years.
If no competing bid for WSA is forthcoming, then the slight premium AF has paid for his WSA stake, which he'll take a hit on, will effectively represent a very cheap option premium that enabled him to shoehorn himself into the future downstream processing JV with IGO.
If a competing bid is forthcoming (doubtful), then IGO will up their bid and do whatever is required to win the battle. (It really is that strategically important for them to obtain WSA.) In that case, AF would very likely make a modest gain on his 10% stake, while having snared the real prize he was chasing all along, per above. Brilliant!
It's a masterclass case study in corporate maneuvering that commands respect. It reminds me of the good old bad old days when Robert Holmes à Court was alive and on the prowl.
Will BHP counter? Perhaps, if they view the likelihood of lost future contained Ni in concentrate from WSA as a serious strategic threat to NW ops. However, MH (BHP CEO) is a disciplined task master, so the internal argument at NW/BHP would need to be compelling. He's very unlikely to give NW and open cheque book. Just look at the recent Norton experience. I see IGO as far more motivated with far more future growth at stake. For me, it's a 'no' on the BHP question.
I think the bigger question is whether BHP will eventually lob a bid for IGO. IGO's pivot to be solely battery metals facing would surely have the corporate wonks at BHP thinking about just how well IGO would fit, given BHP's pivot to the de-carbonising thematic.
Commiserations to all WSA LTHs who would have preferred to ride the broader thematic without having the rug pulled out. That's gotta hurt. Yes, there's an premium built-in to the current bid, but that's really just short-term-ism to distract from the larger benefits to be gained as the unfolding secular Ni thematic matures. A scrip offer for IGO shares would have been far more preferable, in that instance.
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