Forrest’s Wyloo Metals raises Noront Resources offer after talks end with BHP

Australian mining magnate Andrew Forrest’s Wyloo Metals has raised its offer for Noront Resources, in the latest twist in a tussle for the Canadian nickel producer’s assets.

Wyloo, Noront’s top shareholder, increased its offer to C$1.10 a share, which values the company at $616.9 million (US$485.25 million). The offer comes after Wyloo ended talks with BHP on the subject of supporting its C$0.75 per-share offer.

Wyloo’s C$1.10 per share deal is 57% higher than its prior bid and significantly outmatches BHP’s C$0.75 per-share offer. With a stake of 37.2% in Noront, Wyloo said it does not intend on supporting any other offer and that ‘a competing takeover bid will be unlikely to meet any minimum tender condition’.

However, BHP still encouraged Noront shareholders to accept its latest bid: “The offer is the only offer available to Noront shareholders and it continues to have the support and recommendation of the Board of Directors,” said the world’s largest miner in a statement.

BHP requires the support of 50% of the company’s shareholders and has already secured support from Noront’s board. Shareholders have until a deadline of 7:00pm Toronto time on January 14 to accept BHP’s offer.

At the centre of bidding war is competition to own Canada’s ‘Ring of Fire’ – an emerging polymetallic area in Northern Ontario – which Noront has access to. In particular, the Australian miners are vying for  supply of nickel, a key metal used in electric vehicles.