BHP (ASX:BHP) share price struggles as nickel battle heats up

BHP shares are slipping in morning trade on Wednesday.

| More on:
Man in mining or construction uniform sits on the floor with worried look on face

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The BHP Group Ltd (ASX: BHP) share price is trading in the red on Wednesday, slipping around 1% from the open.

BHP shares may well be struggling amid fresh news out of Andrew "Twiggy" Forrest's Wyloo Metals Pty Ltd camp on Wednesday, that it has upped the stakes in its bid to acquire Canadian nickel miner Noront Resources Ltd.

Let's investigate further.

What is the situation?

Recall that BHP had previously made a C55 cents (A60 cents) per share offer to acquire Noront, located in Canada's "ring of fire" prospecting area in July. This offer has already gained support from Nordont's board.

On Monday, Wyloo Metals stepped in and has offered to acquire Noront for C70 cents (A76 cents) per share in an all-cash offering. As such Wyloo's offer is a 27% premium on top of BHP's bid.

Wyloo Metals is already a 37.5% stakeholder in Nordont, meaning its upsized offer may have more weight behind it. Wyloo does not intend to support the BHP offer.

Should the transaction tilt in favour of Wyloo, Forrest would become Noront's chairperson.

BHP has pushed back, stating that it did not need Wyloo's support. It stated that Forrest's company has only made a proposal, whereas the "BHP offer is the only offer that has been made to shareholders", today's Australian Financial Review reports.

Noront's share price has jumped to C75 cents (A81 cents) at the time of writing, having gained around 25% on the day of Wyloo's offer.

The Canadian nickel miner has also weighed in, confirming that BHP is the only offer on the table, whereas Wyloo's angle is a "non-binding proposal".

BHP share price snapshot

The BHP share price is down 0.92% at $45.19 at the time of writing.

Shares in the mining giant have climbed around 6% this year to date and gained just over 20% over the past 12 months.

Both of these results have lagged the S&P/ASX 200 index (ASX: XJO)'s gain of around 25% over the past year.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why Dateline, DroneShield, Ora Banda, and Pilbara Minerals shares are dropping today

These shares are ending the week in the red. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Qantas, Resimac, Tyro, and Soul Patts shares are falling today

These shares are having a tough session today. But why?

Read more »

a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.
Share Fallers

Why Betr, Evolution, NIB, and West African Resources shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Elders, IDP Education, Life360, and Pilbara Minerals shares are falling today

Let's see why investors are selling these shares.

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Share Fallers

The 5 worst performing ASX 200 shares in May unmasked

These five ASX 200 shares got smashed in May. But why?

Read more »

Disappointed man with his head on his hand looking at a falling share price his a laptop.
Share Fallers

Why Brazilian Rare Earths, Mineral Resources, Pilbara Minerals, and Syrah shares are falling

Why are these shares starting the week in the red?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Brainchip, Findi, Lottery Corp, and REA shares are falling today

These shares are ending the week in the red. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why ALS, Black Cat, Boss Energy, and Soul Patts shares are falling today

These shares are falling on Thursday. Let's find out why.

Read more »