The IGO Ltd (ASX: IGO) share price is heading south on Tuesday following an announcement from the company.
After reaching a record high of $15.04 yesterday, it appears the battery metals producer's shares are cooling off today.
At the time of writing, IGO shares are swapping hands for $14.50, down 3.33%.
It's worth noting that the S&P/ASX 200 Materials Index (ASX: XMJ) also touched an all-time high on Monday of 19,276.7 points.
Nonetheless, the sector is reversing the gains made to trade at 19,063.2, down 0.52%. This is the worst-performing sector for the day so far.
Let's take a look at what the company updated the market with earlier today.
IGO acquisition hits roadblock
Investors are digesting the company's latest news today, sending the IGO share price into negative territory.
In an announcement, IGO provided an update regarding the proposed acquisition of Australia-based nickel producer Western Areas Ltd (ASX: WSA).
Proposed in mid-December 2021, the scheme of arrangement would see IGO acquire 100% of Western Areas for $3.36 per share.
The consideration implies a total value of around $1,096 million for the company, subject to certain customary conditions.
However, IGO noted Western Areas' trading halt request on the ASX today.
IGO believes an independent expert engaged by Western Areas has finalised the draft Independent Expert's Report (IER).
IGO's understanding is that the document concluded that the scheme is neither fair nor reasonable to Western Areas shareholders.
As such, the board of Western Areas intends to terminate the scheme of implementation deed with IGO. This is contrary to the board previously recommending its shareholders vote in favour of the scheme.
IGO stated it will look at its options once the draft IER is received and reviewed. Although it did point out that there is no guarantee that the scheme will proceed.
In addition, IGO management stated that its long-term view on the nickel price has not materially changed. This is regardless of the recent volatility in nickel on commodity markets, which saw its price soar in early March.
About the IGO share price
The IGO share price has accelerated more than 130% since this time last year on the back of surging commodities prices.
When looking at year to date, the company's shares are almost 30% in the green.
IGO has a price-to-earnings (P/E) ratio of 17.40 and commands a market capitalisation of roughly $11.4 billion.
