Andrew Forrest move could set up fight for Western Areas
IGO could face a battle for control of WA miner Western Areas, with Andrew Forrest’s Wyloo buying shares in the nickel miner.
Miner IGO could be faced with a fight for control of West Australian nickel producer Western Areas, as Andrew Forrest’s Wyloo Metals buys shares in the wake of revelations the companies are in takeover talks.
The Australian’s DataRoom reported that IGO told the market on Thursday that it had held preliminary talks with Western Areas about an acquisition of the nickel miner, as it plans to sharpen its focus on minerals used for technology such as batteries in electric vehicles.
However Wyloo issued a substantial shareholder notice on Friday, saying it had a 5.3 per cent stake in Western Areas. Wyloo is believed to have been sitting on a minor 1.5 per cent stake ahead of this week.
The move suggests Wyloo could also see itself as a potential consolidator of the WA nickel sector, given it already holds 15 per cent of Mincor Resources, which is building a new nickel mine and is said to have been involved in merger talks with Western Areas earlier this year.
Wyloo also owns a stake in fellow WA nickel plays Poseidon Nickel and Panoramic Resources.
It is also involved in a fight with BHP for control of Canada’s Noront Resources, signalling this week it does not plan to sell its holding in the nickel explorer into BHP’s $350m on-market bid for the company.
Wyloo, which made an offer for Noront in May but was trumped by BHP’s bid for the company last month, said in a statement it would not sell its 37 per cent stake in Noront to the global mining giant, and was considering whether it would seek to top the BHP offer.
“Wyloo Metals was disappointed that the Noront Board did not seek to meaningfully engage or negotiate with it prior to accepting the BHP offer. Given Wyloo Metals’ cornerstone interest of approximately 37.5 per cent (partially diluted) of Noront, the minimum mandatory tender condition for BHP’s bid is unlikely to be satisfied without Wyloo Metals’ support and a second step acquisition transaction is impossible,” the company said.
“Wyloo Metals would consider proposing a superior offer to acquire the outstanding common shares of Noront it does not already own, should it be provided with access to due diligence.
“Despite numerous attempts to date, the Noront board has denied Wyloo Metals from obtaining access to due diligence on reasonable terms for a shareholder with a cornerstone position.”
Western Areas shares were up 13c, or 4.6 per cent, to $2.93 at 11.30am (AEST) on Friday.
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