IGO has been forced to up its offer to keep alive hopes of securing takeover target Western Areas after the friendly tie-up was derailed by an independent expert’s report.   The two companies emerged from days of talks to reveal they had agreed on a higher cash offer of $3.87 a share, up just over 15 per cent from an initial $3.36-a-share.

The new bid values Western Areas at just more than $1.26 billion. The offer represents a 6 per cent premium to Western Areas’ last traded price on April 4 before its shares were placed in a halt.

Western Areas chair Ian Macliver said the board had unanimously recommended to shareholders that they approve the revised scheme.

“The board is pleased to have negotiated an agreement with IGO considering the recent volatility in the nickel price and the positive impact this has had on Western Areas’ cashflow position and fundamental asset value since the initial scheme was announced on December 16, 2021,” Mr Macliver said.

The deal was left on the brink of collapse when KPMG, which had been appointed by Western Areas to rubber stamp the union, amended a draft report from January which had declared it fair and reasonable to say it was no longer in the best interests of shareholders.   IGO had initially said its $3.36-a-share offer was based on its long term-view of nickel market fundamentals and pricing.

The timetable for IGO’s offer has been extended until July 31.