Market observers believe that Mincor shareholders will likely buy into the $752m takeover bid made by Andrew Forrest’s Wyloo Metals, even though most probably have been holding out for a higher price.
The $1.40 per share offer for the nickel miner from the interests of the billionaire was declared best and final this week, so the chances of a higher bid are unlikely unless BHP or another party comes forward with a proposal to buy the company.
Wyloo’s offer is unconditional, and the question being asked is whether it would have still bid for the business knowing that Mincor had to withdraw its earnings guidance because it could not agree a deal with BHP over the supply of nickel to BHP’s smelter in Kalgoorlie, Western Australia.
Working for Wyloo is Bank of America, while Mincor is advised by Barrenjoey and Sternship Advisers.
Market analysts say that Mincor is important for BHP, because it needs a certain amount of external ore for its smelter, and it is reliant on Mincor to provide this.
Without it, BHP needs to change the way it operates.
Wyloo’s deal is non-conditional, so there is little opportunity to extract itself from the buyout, yet perhaps Wyloo was a keen buyer despite the change to Mincor’s guidance.
When Wyloo made its approach, it had a 19.9 per cent stake in Mincor.
Mincor has told shareholders to take no action.
The target’s statement is out Tuesday.
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