Nice summary: Nice Xmas bonus to all holders.

IGO switches to all-cash to win Western Areas

RELATED QUOTESPerth-based nickel/copper miner IGO Ltd has agreed an all-cash takeover offer for rival Western Areas.

It is understood the bid values Western Areas at more than $3.30 a share, which would be about a 35 per cent premium to where the stock was trading prior to the proposed deal leaking in August.

Street Talk. Jim Rice

The deal is expected to be announced on Thursday.

While IGO and Western Areas have been in talks for months, the twist is the all-cash nature of the bid.

IGO initially approached Western Areas with a scrip-based proposal, however returned with a cash bid to take out all of the company’s shareholders. The new bid saw talks heat up again in the past few weeks.

The bid would value Western Areas at more than $1.1 billion. Western Areas is expected to tell shareholders to accept the offer.

Both companies’ shares went into a trading halt on Thursday morning.

Rothschild & Co and Goldman Sachs are advising Western Areas, while Macquarie Capital is in IGO’s camp.

For IGO, acquiring Western Areas would re-stock its nickel pipeline at a time when its Nova nickel mine has only an estimated five years left of production.

Western Areas, as it told shareholders when it released 10-year production guidance in late July, reckons it will be producing north of 15 thousand tonnes of nickel a year for the next decade, with production exceeding 20 thousand tonnes from the 2028 financial year.