The Western Areas Ltd (ASX: WSA) share price is up more than 10% on speculation that the nickel miner could be a takeover target.
Is there going to be a takeover bid?
The nickel miner made an announcement to note the media reports by the Australian Financial Review in relation to a potential transaction involving the company.
Western Areas confirmed it was in preliminary discussions with IGO Ltd (ASX: IGO) about a potential takeover offer and the basis about which talks and due diligence between the two companies can proceed.
Western Areas said that given the preliminary stage of discussions, there can be no assurance about whether a transaction will happen or what the terms and conditions of a deal would be.
IGO also put out a very similar update as well, so both of them have confirmed that talks are happening but there’s still more to talk about.
If you haven’t heard of IGO before, it describes itself as a company focused on creating a better planet for future generations by discovering, developing, and delivering products critical to clean energy.
IGO owns and operates the Nova nickel-copper-cobalt operation in Western Australia and is invested in a lithium focused joint venture with joint venture partner, Tianqi Lithium Corporation, which has 51% stake in the Greenbushes lithium mine and a 100% interest in a downstream processing refinery at Kwinana producing battery grade lithium hydroxide.
Summary thoughts on the Western Areas share price
Investors will have to see whether this deal eventuates. Being larger in the mining sector does come with scale benefits, so it could make sense for IGO. Western Areas reported growth in its March quarterly update.
