PERTH (miningweekly.com) – Russia’s invasion of Ukraine, and the subsequent volatility in the nickel market, has resulted in a delay in ASX-listed Independence Group's (IGO’s) takeover of fellow listed Western Areas.
Western Areas on Monday told shareholders that in response to the recent significant nickel price volatility, which led to the temporary and currently ongoing suspension of nickel trading on the London Metals Exchange on March 8, Western Areas and the independent expert were continuing to consider the implications of this volatility on the market expectations for medium- to long-term nickel prices, if any.
The independent expert is expected to deliver a report to Western Areas shareholders in April, along with Western Area’s recommendation for the takeover offer and information on the scheme and scheme meeting.
These documents had originally been scheduled for delivery in March, with the implementation date of the agreement targeted for April. The implementation is now expected in either May or June.
IGO on Monday acknowledged the recent short-term volatility in the LME nickel market and price, which it primarily attributed to the Russian invasion of Ukraine, which in turn had reportedly created the need for a large industry participant to manage a nickel short position on the LME.
“IGO’s valuation of Western Areas and the proposed Scheme consideration of $3.36 in cash per share is based on IGO’s long-term view of the nickel market fundamentals and price, which has not changed,” IGO told shareholders.
“IGO has no obligation, nor any current intention to increase the consideration in response to these short-term events, although it reserves its right to do so. As always, IGO remains disciplined in its approach to growing the business via mergers and acquisitions,” the company said in a statement.