Noront Resources Terminates Agreement With BHP, To Be Acquired By Wyloo Metals Instead
After a series of back and forth acquisition offers, Noront Resources Ltd. (TSXV: NOT) announced on Wednesday that it has entered into an acquisition agreement with Wyloo Metals. This follows after BHP Lonsdale waived its right to match the offer.
According to the agreement, Wyloo Metals is offering to acquire all outstanding Noront Resources common shares at $1.10 per share, representing a 358% premium to the closing price on May 21, 2021. The offer is also a 47% premium to BHP’s current offer of $0.75 per share.
After waiving its right to match the offer, BHP agreed to also waive the allotted period to terminate the support agreement. As a result, Noront Resources terminated the agreement and made a $17.78 million payment to BHP.
The new agreement with Wyloo Metals stipulates a $26 million termination payment.
The bidding war started just months after Wyloo Metals became a partner of Noront Resources and started floating unsolicited offers to acquire the latter. BHP first made an all-cash offer to acquire the firm at $0.55 per share in July, which was matched by Wyloo Metals at $0.70 per share.
BHP increased the offer to $0.75 per share in October.
In connection with the transaction, Wyloo Metals provided Noront with a $29.38 million loan, which was partly used by the latter to settle the termination payment to BHP.
Wyloo Metals, through its subsidiary Wyloo Canada, currently holds approximately 37.2% equity in Noront Resources.
The proposed transaction is still subject to the approval of Noront Resources shareholders, which are expected to hold a special meeting no later than March 31, 2022. Should the transaction push through, the shareholders have the option to remain as a shareholder or opt to receive cash consideration by electing to sell their shares to Wyloo Metals.
Noront Resources last traded at $1.07 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.