Doubts arise over IGO/Western Areas deal
PERTH (miningweekly.com) – Takeover target Western Areas has gone into a trading halt, with reports emerging that an independent expert had found that the takeover offer by fellow listed Independence Group (IGO) was neither fair nor reasonable, and not in the best interest of shareholders.
Western Areas is currently the subject of a takeover bid from IGO, under which Western Areas shareholders will receive A$3.36 per Western Areas share in cash, which represents a 35.5% premium to the company’s undisturbed share price of A$2.48 per Western Areas share on 18 August 2021.
While Western Areas was yet to make an announcement to the market, IGO told shareholders that the draft independent expert report had prompted the board of Western Areas to change its recommendation to vote in favour of the scheme, and instead terminate the scheme implementation deed.
IGO told shareholders that it would consider all options with respect to the scheme once the draft independent expert report is received and reviewed. However, the company stressed that there was no guarantee that the scheme will proceed.
“As previously stated, IGO’s valuation of Western Areas and the proposed scheme consideration of A$3.36 in cash per share were based on IGO’s long-term view of the nickel market fundamentals and price. Despite recent volatility in the nickel price, IGO’s long-term view on the nickel price has not materially changed,” the company said.
“IGO remains focused on pursuing growth opportunities that deliver value to IGO’s shareholders. While it will assess all options available with respect to the scheme, IGO will remain disciplined in the execution of all merger and acquisition activity.”
Western Areas shares were trading at A$3.65 a share at the time of the share trade halt, with the company’s share price consistently trending upwards since the start of the year.
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