Shares in resources giant IGO Limited (ASX: IGO) are heading lower, trading 5.92% in the red at $11.75 apiece at the time of writing.
Whilst there's been nothing market sensitive out of the company's camp this past week, its share price is down 10% in that time.
The company did, however, release an update regarding its proposed acquisition of Western Areas Limited (ASX: WSA). Whilst the announcement isn't market sensitive, it's still worth a look.
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What did IGO announce yesterday?
The company provided an update on its proposed scheme of arrangement in acquiring Western Areas. IGO said both parties are taking a closer look at the details after the price of nickel soared to record heights on 8 March.
The company had previously announced the proposed acquisition back in December last year.
In response to nickel's price rally, IGO said that it, Western Areas, and an independent expert are "continuing to consider the implications, if any, on nickel market fundamentals and expectations for medium to long-term nickel prices".
As a result of the process, there will be a slight change in the scheme's timetable. A first court hearing will now be in April 2022, whereas the implementation date is set for May/June 2022, according to the update.
The review is important, IGO says, because its valuation of $3.36 in cash per share for Western Areas is "based on IGO's long term view of the nickel market fundamentals and price, which has not changed".
Despite the recent rally in nickel, the company says it won't be revising anything in response.
"IGO has no obligation, nor any current intention to increase the consideration in response to these short-term events (although it reserves its right to do so)," the company remarked.
"IGO acknowledges the recent short-term volatility in the [London Metals Exchange] LME nickel market and price, which is primarily attributed to the Russian invasion of Ukraine, which in turn has reportedly created the need for a large industry participant to manage a nickel short position on the LME."
Despite the outcome, IGO's share price has continued to slip this week and has fallen off its previous high of $13.07 on 9 March, just two days after the trading activity on the LME.
Trading volume is also less than 50% of its 4-week average during today's session and it appears the bears have it with IGO at the moment.
IGO share price summary
In the last 12 months, the IGO share price has climbed around 83% and is up 3% this year to date.
In the past week, it has slid more than 9%, taking a 3% hit over the last month of trading.
The company has a current market capitalisation of around $8.9 billion.
