Mineral Resources share price slumps despite major Norwest takeover milestone

Let's take a closer look at what's unfolded.

| More on:
A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer

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

Key points

  • The Mineral Resources share price is in the red on Friday, falling 1.23% to $85.60
  • That's despite the mining giant gaining control of takeover target Norwest Energy
  • Nearly 54% of the energy outfit's shares have been relinquished, with Mineral Resources' Chris Ellison urging remaining shareholders to accept its "no brainer" offer 

The Mineral Resources Ltd (ASX: MIN) share price is tumbling on Friday despite the company officially taking control of takeover target Norwest Energy NL (ASX: NWE).

The market is reacting poorly to today's news with the Mineral Resources share price currently 1.23% lower at $85.60.

Meanwhile, the Norwest share price has slumped 2.26% to trade at 6.5 cents.

Let's take a closer look at the latest from the S&P/ASX 200 Index (ASX: XJO)'s mammoth miner.

Mineral Resources share price plunges on takeover milestone

Major acquisition news appears to have failed to bolster market sentiment in Mineral Resources shares today.

The company revealed its voting power in Norwest surged to 53.86% on Thursday. That leaves it with control over the $425 million energy outfit.

The now-majority stakeholder offered one of its own shares for every 1,300 Norwest stocks held last month. The bid secured the approval of the takeover target's board after a lower offer was rejected in December.  

That implied an offer price of 7.41 cents per share at the time. It also represented a 65% premium on the takeover target's last undisturbed share price.  

Mineral Resources managing director and billionaire Chris Ellison has urged remaining Norwest shareholders to accept the offer, saying it's a "no brainer":

Those who don't accept will be left behind in a MinRes-controlled company with none of the upside of being a MinRes shareholder or exposure to our world-class portfolio of diversified assets.

Those who fail to promptly accept our revised offer will also miss out on receiving our interim dividend and risk having their own share price and liquidity diminish – but will still have to shoulder the burden of their share of significant Perth Basin exploration and development risk.

Mineral Resources' offer has been extended to 2 March on the milestone. It will be able to acquire all Norwest shares if its interest reaches 90%.

The ASX 200 mining giant is gearing up to release its earnings for the first half of financial year 2023 next Friday.

Motley Fool contributor Brooke Cooper has no position 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 Scott Phillips.

More on Mergers & Acquisitions

two men shake hands on a deal.
Mergers & Acquisitions

Wesfarmers shares lower on $770m asset sale

Let's see which business the conglomerate is offloading.

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Real Estate Shares

ASX 200 stock slips on $482 million retail deal

The ASX 200 stock is expanding its retail holdings by almost half a billion dollars.

Read more »

a woman drawing image on wall of big fish about to eat a small fish
Financial Shares

Guess which ASX 200 share just received a $2.68b takeover offer

Private equity firm Bain Capital has its eyes on this financial services company.

Read more »

A senior pharmacist talks to a customer at the counter in a shop
Mergers & Acquisitions

Own Sigma shares? Here's the latest on the Chemist Warehouse merger

One year ago today, the two companies announced plans to merge. We could now be just a few months away…

Read more »

Two CEOs shaking hands on a deal.
Mergers & Acquisitions

2 ASX 200 shares announcing acquisitions today

M&A activity is heating up with two deals announced this morning.

Read more »

businesswoman holds hand out to shake
Mergers & Acquisitions

Is this ASX All Ords stock primed for a takeover offer in 2025?

The ASX All Ords stock could draw the interest of global companies saddled with fading patents.

Read more »

Woman shaking the hand of a man on a deal.
Mergers & Acquisitions

Up 146% in a year, ASX 200 stock marches higher on $950 million acquisition news

The ASX 200 company is expanding its renewable energy footprint.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Gold

Guess which ASX 200 gold share is up 29% amid $5b takeover offer from Northern Star

A big deal has been signed between two ASX 200 gold shares on Monday.

Read more »