The Western Areas Ltd (ASX: WSA) share price is wobbling today following confirmation the company has entered due diligence with IGO Ltd (ASX: IGO).
IGO is considering taking over the nickel producer. It has supposedly gained access to Western Areas’ books for the due diligence period.
At one stage in morning trade, the Western Areas share price climbed into the green. However, at the time of writing, shares are swapping hands for $2.93 apiece — 0.51% lower than their previous close.
Let’s take a closer look at news and rumours surrounding the potential takeover.
Western Areas’ talks with IGO resume
The Western Areas share price is in the green today after IGO announced it has entered due diligence regarding a “potential change of control transaction” for the company.
IGO noted the discussions are in their infancy and there’s no guarantee they’ll amount to a takeover bid. It’s the second time in as many months the market has heard IGO is interested in taking over Western Areas.
The Western Areas share price soared 12.9% when it confirmed IGO was interested in acquiring it in August.
Last night, the Australian Financial Review (AFR) reported IGO has been given access to Western Areas books.
Previously, the publication reported IGO put a $1 billion scrip-heavy bid to Western Areas. Presumably, the purported bid was denied.
Now, the AFR reports IGO has been given access to Western Areas’ books to allow it to consider producing a bid that’s more likely to be accepted.
However, IGO told investors not to get too excited yet. It said there’s no certainty the discussions will result in a takeover bid.
IGO is said to be particularly interested in Western Areas’ up-and-coming Odysseus Mine.
All eyes will be on IGO and Western Areas over the next month, as the market now reportedly has around 4 weeks to wait before IGO’s due diligence ends.
Western Areas share price snapshot
Western Areas’ stock has been performing well this year.
It has gained 9% since the start of 2021. It is also currently 30% higher than it was this time last year.