Wyloo Metals has ramped up a bidding war against BHP for the acquisition of Canada’s Noront Resources with a significantly upgraded offer of $C0.70 ($0.76) per share for the target.
In July, BHP proposed a $C0.55 per share takeover bid for Normont worth $C325 million, which was unanimously backed by the Canadian company’s board.
This trumped Wyloo’s opening offer of $C0.315 per Noront share in May 2021.
Wyloo, which is owned by mining magnate Andrew Forrest, is Noront’s largest shareholder with 37.5 per cent.
According to Wyloo head Luca Giacovazzi, the initial offer made in May was due to Noront wanting to make a deal with BHP.
“In April this year, we were deeply concerned when the Noront board proposed to farm out Noront’s exploration projects to BHP for only C$25 million,” Giacovazzi said.
“Rather than consenting to such a transaction, we decided to make an offer to acquire the company.
“Our fears were justified when the Noront board completed a deeply discounted 5 per cent placement to BHP, giving away a strategic toehold in the company to an obvious suitor.”
Wyloo’s $C0.70 per share for Noront is 192 per cent higher than its $C0.24 closing price from May 21, 2021.
“Wyloo Metals didn’t make its cornerstone investment in Noront earlier this year to accept an offer that represents a fraction of the potential value of Noront’s Ring of Fire assets.
“We invested in Noront because it has the potential to be Canada’s next great mineral hub and produce the metals critical to decarbonising our planet.”
Noront is exploring the Eagle’s Nest nickel project in Canada, which is located in Ontario’s Ring of Fire, a highly prospective area for mineral exploration.
Wyloo’s offer will allow Noront shareholders to remain shareholders of the company under new board of directors.
“Since our initial proposal, we have listened to the feedback from shareholders who, like us, believe in the future of the Ring of Fire.,” Giacovazzi said.
“We believe Noront shareholders deserve the chance to decide whether to join us in rebuilding the company, and not be pressured into selling all of their shares unless they want to.”