BHP terminates support agreement with Normont after withdrawing takeover offer

Multi-national mining, metals and oil giant BHP has ripped up its support agreement with Canadian miner Noront Resources (Normont), after pulling out of a potential deal to acquire the nickel specialists last week.

Its subsidiary BHP Lonsdale Investments officially terminated the arrangement with Noront today, which gave BHP the right to match any proposal.

However, the world’s largest listed miner decided to withdraw from talks as it did not see “adequate long-term value” in raising its previous C$0.75 per share bid.

BHP was gazumped by an eleventh-hour bid from Wyloo Metals, which valued Noront at $478.11 million (C$616.9m) – with a cash offer of C$1.10 per share.

Wyloo is Noront’s biggest shareholder and has been locked in a takeover battle with BHP since the summer, with both miners pushing to secure supplies of nickel — the key battery metal used in electric vehicles.

BHP and Wyloo held talks with each other in November to try and make a shared arrangement, but the discussions ended this month without any breakthroughs.

Both companies were eyeing Noront’s Eagle Nest nickel asset in Canada’s so-called Ring of Fire — a high-grade deposit of the metal alongside copper and palladium.

As part of the new deal, Wyloo will also provide Noront a loan of C$29.4 million to help cover the C$17.8 million termination fee it owes BHP.

The two companies will organise a special meeting of shareholders in early 2022 to vote through the arrangement.

BHP has enjoyed success elsewhere in its energy transition plans, with the firm divesting from its oil assets through a deal with Woodside Oil.

It also remains on course to abandon its dual-listing and leave the FTSE 100 – instead trading on the London Stock Exchange’s main market while moving its main listing to Sydney.

The plans were approved by the board earlier this month.