Andrew Forrest’s Wyloo Metals emerges with potential blocking stake in $1.bn Western Areas takeover
Andrew Forrest has spent $32m on Western Areas shares at a premium to the IGO takeover price, as competition to consolidate the WA nickel sector heats up.
Iron ore billionaire Andrew Forrest has made his move in the race to consolidate the WA nickel sector, building up a potential blocking stake in IGO takeover target Western areas.
Dr Forrest’s Wyloo Metals emerged as a 9.1 per cent holder in Western Areas on Tuesday evening, with the mining magnate paying $31.5m to top up its holding in the nickel miner at an average price of $3.43 a share – well above IGO’s $3.36 offer for the company.
While Wyloo’s holding does not guarantee it can block the takeover it throws up a major hurdle for IGO, which needs the support of 75 per cent of Western Areas shareholders at a meeting in April if the takeover is to succeed.
With not every shareholder likely to attend the meeting, a stake of about 10 per cent could be enough to block the transaction.
Dr Forrest has not previously indicated any view on the IGO takeover, but Wyloo boss Luca Giacovazzi told The Australian last year he wanted to see WA nickel producers consolidate to form a “champion” that could stand on the global stage.
The friendly $1.1bn takeover was designed to position IGO as the biggest nickel producer in WA outside of BHP’s Nickel West operations, adding Western Areas Forrestania and Cosmos mining hubs to its own Nova operation.
Dr Forrest may now have picked that champion, with his privately owned mining group also revealing on Tuesday it had sold down its holding in Poseidon Nickel, offloading 158.3 million shares for $17.7m.
Western Areas shares closed at $3.45 on Tuesday, with Poseidon down 1.2c to 9.3c and IGO down 83c to $11.84.
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