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Highlights
- The Noront stock rocketed by almost 379 per cent in the past year.
- The miner posted a return on equity of 44.52 per cent.
- The company’s board of directors unanimously stated that the Wyloo offer was superior to BHP’s.
The Toronto-headquartered base metals and precious metals miner Noront Resources Ltd (TSXV:NOT) accepted the terms of the acquisition agreement proposed by Australian private player Wyloo Metals on Monday, October 18.
Pursuant to the agreed arrangement, Wyloo Metals would purchase up to 100 per cent of Noront’s common shares for a cash consideration of C$ 0.70 apiece. This cash consideration indicates a premium of 192 per cent to the NOT stock’s unaffected closing price on May 21 and a premium of 27 per cent to BHP Western Mining Resources International Pty Ltd’s acquisition offer of C$ 0.55 per share.
Under the Noront-Wyloo Metals agreement, NOT shareholders are expected to choose whether to sell all the common shares or a portion of it to Wyloo Metals. The shareholders who wish to retain their Noront shares will become shareholders in the company.
Also read: Top 5 Canadian gold stocks to buy at low prices & hold long term
Stock performance
As Noront announced the agreement, its stock witnessed a drop of 3.658 per cent to C$ 0.79 apiece at market close Monday, October 18. At this point, it was priced nearly six per cent below the 52-week high of C$ 0.84 scored on October 7.
Its stock soared by almost 379 per cent in the past year, increased by approximately 327 per cent on a year-to-date (YTD) basis and expanded by about 216 per cent in the last nine months. Its stock surged by almost 204 per cent in the last six months and climbed nearly 147 per cent in the last three months. However, it marked a decline of more than two per cent in the past month.
At the time of writing, the company held a market capitalization of C$ 436 million and a return on equity (ROE) of 44.52 per cent with a 10-day average trade volume of 0.35 million.
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Bottom line
Noront CEO Alan Coutts said that the company’s board of directors, including its Special Committee with advice from external financial and legal advisors, unanimously concluded that the Wyloo offer (worth C$ 0.70 per share) was a superior proposal for its shareholders than the offer from the rival BHP, worth C$ 0.55 per share.
