(Alliance News) - BHP Group PLC on Tuesday held firm on its offer for Noront Resources Ltd, after Australian miner Wyloo Metals Pty Ltd proposed an increased CAD0.70-per-share takeover.
Noront is a Canadian mining company, listed on the TSX Venture Exchange.
Wyloo's rival proposal announced on Monday is worth more than double Noront's unaffected closing price of CAD0.33, and a 27% premium to BHP's bid of CAD0.55 made in late July. BHP's offer is worth CAD325 million, equivalent to around USD257.4 million.
Luca Giaovazzi, head of Wyloo Metals, said: "In April this year, we were deeply concerned when the Noront Board proposed to farm out Noront’s exploration projects to BHP for only CAD25 million. 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% placement to BHP, giving away a strategic toehold in the company to an obvious suitor," said
"Since our initial proposal, we have listened to the feedback from shareholders who, like us, believe in the future of the Ring of Fire. 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," Giaovazzi added.
BHP noted that the Wyloo proposal is non-binding and remains subject to due diligence and the negotiation of several transaction agreements. In addition, Wyloo said it is unwilling to sign a confidentiality agreement to facilitate the completion of its due diligence as it would have been forced to accept certain restrictions.
As a result, BHP has agreed to waive the requirement in its support agreement with Noront that a confidentiality agreement with Wyloo will include such standstill provisions.
"Despite their latest press release, Wyloo has not made a formal offer and the BHP offer is the only transaction currently available to Noront shareholders. Wyloo's support is not required in order for BHP's offer to be successful, and we remain confident in our offer," said Chief Development Officer Johan van Jaarsveld.
"We have the financial strength, world-class mining expertise, and commitment to work in partnership with stakeholders to advance Eagle's Nest and the Ring of Fire, which has the potential to deliver benefits to local communities, First Nations, and Ontario for years to come."
Shares in BHP were down 0.9% at 2,260.00 pence on Tuesday in London, while its Johannesburg shares were 2.6% lower at ZAR454.28.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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