Andrew Forrest's Wyloo Metals has lobbed a $760 million cash takeover for restarting nickel player Mincor Resources, using the target’s ailing share price in a bid to sway investors.
Andrew Forrest's Wyloo Metals has lobbed a $760 million cash takeover for restarting nickel player Mincor Resources, using the target’s ailing share price in a bid to sway investors.
The Luca Giacovazzi-steered group has proposed to buy all shares it does not already own in Mincor for $1.40 each, implying a 35 per cent premium on the company’s last trade price before the takeover attempt of $1.04.
Wyloo’s bid comes as Mincor ramps up its Kambalda nickel operation - comprising its flagship asset, the Cassini Nickel Mine and the Northern Operations – just over a year after delivering first nickel to offtake partner, BHP Nickel West.
Wyloo already has approximately a 19.9 per cent stake in Mincor and is the company's largest shareholder.
Mincor issued a statement to market in the hours following Wyloo's approach advising shareholders should take no action until they receive a formal recommendation from the board, noting that Wyloo had not declared its offer as best and final.
Chief executive Gabrielle Iwanow said Mincor's assets were 'highly strategic' for indsutry players.
"As Mincor approaches full ramp-up in mining, and continues to pursue its highly prospective exploration opportunities, we believe that this strategic value will continue to grow," Ms Iwanow said.
In its bidder's statement issued this morning, Wyloo said the fact it already had a sizeable stake in Mincor meant there was a low likelihood of a superior competing proposal.
Making a move for the company is in line with Wyloo's broader strategy to pursue commodities needed for decarbonisation.
In a pitch to investors this morning, Wyloo put to Mincor investors that the on-market, cash offer represented attractive value and alluded to ‘risks and uncertainties’ in remaining a Mincor shareholder in the face of ‘prevailing economic and equity market risks.’
“Wyloo considers these risks may be weighing on Mincor’s valuation, as demonstrated by the 49 per cent decline in its share price over the last 12 months,” the statement read.
News of the takeover sent Mincor's share price up 40 per cent to trade at $1.46, implying a market capitalisation of about $781 million.
Around this time last year however Mincor's shares were changing hands at about $2.09.
Wyloo’s frontman Luca Giacovazzi said Wyloo was providing an immediate opportunity for Mincor shareholders to dispose of their shares at a significant premium to the target’s last close.
“Wyloo’s Offer is unconditional; shareholders can sell into Wyloo’s on-market bid today and receive certain cash value for their Mincor shares.”
Wyloo has engaged Merrill Lynch Equities Australia as broker and Clayton Utz as legal adviser for the bid.
Sternship Advisers, Barrenjoey and Gilbert + Tobin are have been recruited for Mincor's camp.
Wyloo Metals is a privately owned subsidiary of Andrew Forrest's investment business Tattarang focused on mining and exploration.
Last year, the group closed a $600 million-plus acquisition of Canadian nickel miner Noront Resources after a lengthy bidding war against BHP.
Wyloo also made its first move into rare earths in August 2022, backing ASX-listed aspiring producer Hastings Technology Metals for $150 million via a convertible notes arrangement.
The Mincor offer is set to close May 8.
