BHP remains confident that its C$325 million ($350 million) takeover bid to acquire Noront Resources is stronger than the offer made by Andrew Forrest’s Wyloo Metals on Monday.
The company stated Wyloo’s $C0.70 per Noront share proposal is non-binding, invalidating it from being a formal offer in its current state.
According to BHP, Wyloo must complete due diligence and transaction agreements for the bid to materialise.
“Wyloo states in its press release that it was unwilling to sign a confidentiality agreement to facilitate completion of its due diligence because it would have been required to accept certain standstill restrictions in the confidentiality agreement,” BHP stated.
In response to Wyloo, BHP will waive the confidentiality agreement in support of Noront, allowing Wyloo to complete due diligence.
BHP chief development officer Johan van Jaarsveld said the company has the stronger offer, as Wyloo’s proposal remains uncertain.
“Wyloo’s support is not required in order for BHP’s offer to be successful, and we remain confident in our offer,” he said.
“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.”
Wyloo is Noront’s largest shareholder with a 37.5 interest, however, BHP stated that Wyloo’s support is not required for the company to be successful in its $C325 million offer.
BHP said Noront shareholders will receive its offer price of $C0.55 per share by depositing their shares to BHP before the initial deposit period.
Noront’s board has unanimously recommended its shareholders accept the offer.
Wyloo head Luca Giacovazzi said on Monday its offer would allow Noront shareholders to remain shareholders of the company under a new board of directors.
“In April this year, we were deeply concerned when the Noront board proposed to farm out Noront’s exploration projects to BHP for only $C25 million,” Giacovazzi said.
“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 per cent placement to BHP, giving away a strategic toehold in the company to an obvious suitor.”