Wyloo Metals is proceeding with its plans to take over Mincor Resources, saying its $760 million offer is its “best and final”.
The deal is moving forward despite Mincor previously disclosing quality issues in relation to its nickel.
The offer was originally proposed March 21, and while Wyloo Metals was not aware of any production quality issues Mincor had at the time, it was made aware March 30.
“Wyloo notes Mincor’s operations and guidance update announced to the Australian Securities Exchange, and confirms that it was unaware of the material information contained within that announcement,” Wyloo Metals said in an announcement.
“As a result of these developments, Wyloo has determined that the current offer price of $1.40 per share is best and final and will not be increased, in the absence of a competing proposal.”
The quality issues were found after nickel Mincor supplied to BHP’s Kambalda concentrator did not meet product quality standards.
On March 30, Mincor provided an operations and guidance update in which it was revealed BHP did not approve its request to change the supply contract so Mincor would have further flexibility around product quality standards.
BHP’s refusal meant Mincor had to withdraw its nickel production guidance, which reportedly blindsided Wyloo and led to the company seeking legal advice.
Many options were considered, including Wyloo withdrawing its takeover bid of Mincor. However, according to the deal, Wyloo could only withdraw if it the Australian Securities and Investments Commission gave approval.
As reported in the Australian Financial Review, Mincor’s shares were traded as high as $1.55 on March 29 but the revelation of its product quality issues the following day decreased the stock, where it sits at $1.41 per share offer, close to Wyloo’s offer.
Mincor is set to issue its target statement on Tuesday.