WSA -1.36%: Rumours continue to swirl around a takeover transaction coming from Independence Group (IGO). Reports coming from the media today suggested a mostly scrip bid that would value WSA around $3.10-$3.20/sh was in the works with nth company’s confirming that talks were in progress and due diligence had been granted though Western Areas had reservations around an all scrip offer. It makes sense for a number of reasons, Western Areas is cheap and has lagged the nickel price for a while now. Independence Group needs to add to its nickel given the current life on the Nova project has just 5-6 years left to run, whereas Western Areas is likely to be producing for 20+ years. The rhetoric today downplayed the likelihood of a deal and was likely the reason WSA shares were lower today.
MM is long & bullish IGO & believes a tie up with WSA makes sense at the right price
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