Wyloo outlines sweetened Noront offer
Australian company Wyloo Metals Pty Ltd. said Monday it has provided the board of Noront Resources Ltd. [NOT-TSXV] with a letter outlining a further improved offer to acquire up to 100% of the shares of Noront it doesn’t already own for $1.10 a share.
Wyloo said this marks a 47% premium above the 75 cents per share offered under a takeover bid for Noront proposed by a subsidiary of Australian mining giant BHP Billiton Ltd. [BHP-NYSE, BHPLF-OTCPK].
Details of the proposed offer comes after Wyloo, which holds a 37.2% stake in Noront and can increase its stake to 37.4% by exercising warrants, said it was unable to agree terms on which Wyloo would support a BHP offer for Noront.
The Australian company said Noront shareholders will have the option to accept $1.10 in cash for some or all of their shares, or continue to participate in Noront’s unrealized potential by remaining as a shareholder.
Wyloo said its latest proposal offers greater deal certainty. It said Wyloo does not intend to support any alternative offers for Noront. “Without the support of Wyloo’s 37.25 direct interest in Noront, a competing plan of arrangement cannot be successful, and a competing take-over bid will be unlikely to meet any minimum tender condition,” Wyloo said in a press release.
The company also noted that its ability to formalize the revised Wyloo offer is subject to the Noront’s board’s timely and good faith negotiation for an arrangement agreement in line with its fiduciary duties.
“Given Wyloo Metals and Noront recently agreed to the form of such an arrangement agreement, Wyloo Metals believes that the revised Wyloo offer can be formalized on an expedited basis,” Wyloo said.
Noront looks to be the target of a potential bidding war after it signed agreements with Algoma Steel Inc. and engineering firm Hatch Ltd. to facilitate development of the Ring of Fire mineral district in northern Ontario and associated processing facilities.
Noront is hoping to extract nickel and chromite from its properties in the Ring of Fire area in partnership with local First Nations. Those properties include the company’s 100%-owned Eagle’s Nest deposit, which it has described as the highest- grade nickel-sulphide find in Canada since the Voisey’s Bay discovery in Labrador.
BHP announced its offer on July 27, 2021, saying that Noront represents a growth opportunity in a prospective nickel basin capable of delivering a scalable, new nickel-sulphide district and provides the BHP group with more growth options in future facing commodities.
On December 10, 2021, Noront shares closed at 73 cents. The shares are trading in a 52-week range of 87 cents and 17 cents.