BHP and Wyloo Metals have been unable to come to a mutually beneficial agreement regarding the acquisition of Noront Resources after talks broke down between the two.
Soon after BHP announced it had ended discussions with Wyloo over an agreement regarding the former’s $C0.75 ($0.82) per share offer for Noront, Wyloo upped its bid for Noront to $C1.10 per share – a 47 per cent premium to BHP’s highest offer.
Wyloo said its revised offer would “deliver a superior outcome for Noront shareholders in terms of optionality, price and deal certainty.”
The two companies have been going back and forth with their Noront takeover bids since May.
Wyloo initially offered $C0.315 per share for Noront, which was followed by BHP’s $C0.55 per share all-cash bid worth $C325 million for the Canadian nickel producer in July.
In August, Wyloo ramped up its bid with a significantly upgraded offer of $C0.70 per share for the target.
After initially considering Wyloo’s $C0.70 per share bid non-binding, BHP acknowledged Andrew Forrest’s company had made a superior bid and increased its all-cash offer to $C0.75 per share in October.
BHP and Wyloo had been in talks regarding the latter’s support of BHP’s $C0.75 per share offer for Noront since then.
The expiration date of BHP’s highest tender for Noront was extended four times to accommodate the company’s continued discussions with Wyloo.
Noront’s Eagle’s Nest project, located in Canada’s Ring of Fire, is considered a highly prospective area for the exploration of nickel, copper, platinum and palladium.
The company also owns the Blackbird, Black Thor and Big Daddy chromite deposits in the Ring of Fire region.
BHP has voiced its ambition to expand its nickel and copper footprint, with the aim to invest in additional early-stage development projects going forward.
BHP chief executive officer Mike Henry spoke at the company’s annual general meeting in November, suggesting the success of its current copper and nickel projects should inspire more developments to follow.
“In copper, we have some solid growth ahead over the next five years, thanks to the recently commissioned Spence growth project (in Chile), improving grades at Escondida (in Chile) and more reliable production out of Olympic Dam (in South Australia),” Henry said.
“We have increased our exploration effort and have work underway in Ecuador, Peru, Chile, Mexico, the United States and Australia.”