Thanks for the reminder on Panoramic arsenic.
….And following on from earlier posts …
The game of (nickel) thrones may have everyone just sitting quietly on their chairs from here on in?
Or is Twiggy still an x-factor despite the all cash bid?
Western Areas plans to open the Odysseus nickel mine in the northern Goldfields in 2022. Credit: Western Areas /Western Areas
Andrew Forrest’s Wyloo Metals remains an x-factor in IGO’s recommended $1.1 billion all-cash takeover of Western Areas.
The two companies announced the takeover, which puts a value on Western Areas of $3.36 a share, on Thursday after months of negotiations between the two parties and due diligence by IGO.
It is understood IGO switched from a mainly scrip offer to cash after being unable to strike an agreement with the target.
However the revised bid has the full support of Western Areas’ board including major shareholder Perpetual, which holds 15 per cent of the company’s issued capital.
The two statements from the respective companies gave no indication as to the position of Andrew Forrest’s Wyloo Metals, which recently upped its stake in Western Areas to more than 6 per cent.
Wyloo could emerge as a rival bidder for the company given its recent interest in the sector.
Wyloo chief Luca Giacovazzi this week told The West Australian the company was keen to play a part in the consolidation of the WA nickel sector that would rival the dominance of BHP’s Nickel West.
But he suggested the company could be open to a cash bid for Wyloo’s holding in Western Areas, saying the company would struggle to form a view on a scrip heavy offer for the company.
Wyloo this week upped its offer for Canadian nickel play Noront Resources to $C1.10 a share valuing it at $C616 million in what it hopes will be a knock-out blow in its tussle with BHP over the target.
IGO said it would fund the acquisition with existing cash reserves and a new $900 million senior-secured debt facility.
For IGO, the deal gives it a long-dated new source of nickel through Western Areas’ Odysseus project, which is under construction and has an eight-year mine life.
The project could justify the company’s hopes of developing a downstream nickel processing plant, that would supply nickel sulphate to the burgeoning electric vehicle battery industry.
IGO’s existing flagship Nova project has six years of minelife.
IGO said the acquisition was expected to be free cashflow accretive by financial year 2024 following the ramp-up of Odysseus.
IGO managing director Peter Bradford said the acquisition was a logical consolidation within the WA nickel landscape and further positioned the company on a journey to become a globally relevant supplier of metals critical for enabling a clean energy future.
“Both Forrestania and Cosmos are high-grade, low-cost nickel sulphide operations and this acquisition,together with our existing world class Nova nickel-copper-cobalt operation, will consolidate our position as Australia’s leading independent nickel producer,” he said.
“The unique synergies that will be unlocked across a combined WA nickel hub, combined with the potential downstream optionality that this transaction brings,is expected to generate substantial value for IGO shareholders over the long term.”
The takeover price represents a 3.7 per cent premium to Western Areas last closing price of $3.24 to close and 35.5 per cent premium to its last traded price before news of takeover talks between the two players.
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