The IGO Ltd (ASX: IGO) share price is in the green today amid rumours the company is scouring Western Areas Ltd's (ASX: WSA) books as it considers posing a new acquisition offer.
The mining company responded to the rumours in an ASX announcement earlier today, noting it has entered due diligence with Western Areas in recent days. However, it declined to comment further.
The companies announced they were in takeover talks in August. The market hasn't received any updates on their discussions since.
At the time of writing, the IGO share price is $9.11, 0.89% higher than its previous close.
Let's take a closer look at the rumours regarding the nickel and copper miner's reported potential takeover of Western Areas.
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IGO confirms some truth to takeover rumours
The IGO share price is gaining amid reports its been given access to Western Area's books.
The reported access is apparently part of the recently unveiled due diligence between the 2 companies. The due diligence period reportedly follows an acquisition offer of around $1 billion.
According to reporting by the Australian Financial Review (AFR), Western Areas has allowed IGO access to its books so it can pose a more serious offer.
The publication believes IGO is most interested in Western Area's Odysseus Mine, an up-and-coming nickel mine.
In August, the AFR reported IGO posed a $1 billion mostly scrip offer to Western Areas which was, assumably, rebutted.
Now, it's expected the IGO will take the next 4 weeks to analyse the true value of Western Areas before deciding whether to offer the nickel producer a bid it's more likely to accept.
While the market might be getting excited over the potential acquisition, IGO has warned investors to keep their cool.
The company noted the "potential change of control transaction" is far from certain and, at this point, it's only in discussions with Western Areas.
IGO share price snapshot
The IGO share price has been performing exceptionally well on the ASX lately.
It has gained 42% since the start of 2021. It is also 102% higher than it was this time last year.
For comparison, the Western Areas share price has gained 13% year to date and 31.8% over the last 12 months
