The distracted WSA board may have known it was on to a good...

The distracted WSA board may have known it was on to a good thing ?
If so perhaps short circuiting opposition bids added a premium and the lithium hydroxide sideof IGO  will offset any initial losses?

cheers


https://www.theaustralian.com.au/bu...s/news-story/8a1e3e0d40922738f37a26fb1ffc8363

Western Areas a big winner from IGO’s $1.1bn offer: analysts

Western Areas has come out a winner from IGO’s $1.1bn offer for the nickel miner, according to Bell Potter analysts. Picture: Carla Gottgens/Bloomberg

• BRIDGET CARTER
  DATAROOM EDITOR
  
• 2:32PM DECEMBER 20, 2021

Australian nickel miner Western Areas has come out a winner from IGO’s $1.1bn offer for the business, say analysts from Bell Potter.

IGO agreed to buy Western Areas via a scheme of arrangement last week for $3.36 a share cash, a 35.5 per cent premium to $2.48 – the price of the group’s shares before it told the market about a potential change of control transaction.
The offer was backed not only by Western Areas’ board but by its largest shareholder, Perpetual, which held 14.7 per cent of the target.

IGO is using $900m of debt and $552m of cash to fund the offer.
“This is a fantastic result for Western Areas shareholders,” Bell Potter said in a research note.
“It effectively brings forward and de-risks the value of Western Areas’ production and development portfolio, crystallised via a cash consideration.”

Bell Potter said its earnings forecasts for Western Areas showed marginal profitability or losses for the 2022 to 2023 financial year with no dividends.
Risks around its prime asset, Odysseus, are now transferred to IGO.

They said that they did not see material earnings or free cash flow accretion until the 2024 financial year at the earliest.
“In this context we view IGO as having paid an unnecessarily high premium.”
The analysts said that the solid strategic rationale for the deal which delivered greater de-risking benefits to Western Areas shareholders may well have justified a lower than benchmark premium to be paid.