Andrew Forrest
Australian mining magnate Andrew Forrest's Wyloo Metals has called on the board of takeover target Noront Resources to disclose if they are afforded any benefits by diversified major BHP that will not be made available to ordinary shareholders.
These include any early exercise or vesting options and/or share rights, change of control payments, future employment opportunities or any other arrangements.
Wyloo claims that certain directors and officers of Noront have entered into lock-up agreements in support of the BHP offer, which will yield them a substantial benefit. At BHP’s offer price, these options and share awards amount to C$10-million, the company says.
Noront continues to publicly support BHP’s C$0.55-a-share offer for the company, while Wyloo has expressed frustration that its proposal of C$0.70 a share is snubbed.
Wyloo’s proposal calls for the removal of the current Noront board and proposes its own slate of directors, with Forrest in charge as chairperson. Other proposed members include former Sherrit International chairperson and CEO Ian Delaney, Queen’s Road Capital Investment chairperson and CEO Warren Gilman and Wyloo head Luca Giacovazzi (he is serving on the current Noront board as Wyloo’s representative).
Regarding the removal of a standstill provision, Wyloo says that it has received a revised confidentiality agreement from the Noront board, but that the parties have not been able to agree on a form that will preserve its freedom to communicate directly with shareholders.
Nevertheless, Wyloo says it intends to proceed directly to the finalisation of transaction documents.
The company also took issue with a comment purportedly made by Noront president and CEO Alan Coutts in a recent news article that states that the inclusion of a standstill provision is to ensure that Wyloo does not buy stock on the market based on what it may see in the data room.
Wyloo points out that it cannot purchase any shares in Noront in the open market without triggering the shareholder rights plan, which was adopted in May.
Rather, it believes the primary purpose of the standstill clause is to prevent Wyloo from submitting an acquisition proposal directly to shareholders, advocating for changes to the Noront board or publicly communicating directly with Noront shareholders without the approval of the Noront board.
“We cannot allow our proposal to be subject to inappropriate restrictions from the Noront board, particularly given that our proposal calls for the board’s replacement,” comments Giacovazzi.
Wyloo on Friday submitted an arrangement agreement to the board of Noront for consideration and called on the Canadian company’s board to “act in the best interest of shareholders” by progressing the formalisation of its proposal.
BHP said last week that Wyloo should make a formal offer, stressing that its offer was currently the only transaction available to Noront shareholders.
Both BHP and Wyloo have their eye on Noront’s early-stage Eagle’s Nest deposit, in Canada’s emerging Ring of Fire mining area. The deposit is billed as the biggest high-grade nickel discovery in Canada since the Voisey’s Bay nickel find.