Money

Post Market Wrap | IGO takeover of Western Areas delayed by up to two months

Published

4 years ago

March 14, 2022

Michael Kodari - KOSEC Author

This Post Market Wrap is presented by KOSEC – Kodari Securities

Takeover Scheme of Arrangement likely to settle in May/June 2022
Ongoing suspension of LME nickel trading since March 8 following unprecedented price volatility
Western Areas, advised by KPMG, are considering implications for the nickel market
IGO $3.36 per share cash bid price is locked-in and agreed by Western Areas
IGO firmly on track to become a globally relevant lithium producer

IGO Limited (‘IGO’) is a future-facing business with an exclusive focus on ‘clean energy’ metals that are essential to enabling clean energy production, particularly regards battery storage. IGO has a 49 percent JV stake in Chinese-owned Tianqi Lithium Energy Australia, that provides IGO with a 25 percent interest in the Greenbushes lithium mining operation and a 49 percent stake in the lithium processing plant at Kwinana.

The Greenbushes lithium mine in WA is the world’s largest lithium mine. Lithium is an essential element for the production of batteries. Other projects include a 70 percent Joint Venture exploration interest with Antipa Minerals Limited in the world class Paterson Province.

IGO also has a 70 percent stake in the graphite and nickel-copper Fraser Range Joint Venture with Carawina Resources.

Western Areas takeover delayed by nickel price volatility

Extreme volatility witnessed in global nickel prices on March 8, which saw Nickel soar to above US$100,000 a tonne, resulting in the London Metal Exchange (LME) temporarily suspending nickel trading, has delayed IGO’s takeover of Western Areas Limited (Western Areas). Western Areas, advised by their Independent Expert, KPMG, are considering the implications, if any, on nickel market fundamentals. The Takeover is being effected by a Scheme of Arrangement, where Western Areas shareholders will receive $3.36 cash for each share. IGO’s bid price for Western Areas is locked in at $3.36 per share.

IGO has no obligation, nor any present intention to increase the offer price, in response to the current situation. The transaction values Western Areas at $1096 million. The delay is unlikely to be more than one or two months. The original Implementation Date of the Scheme of Arrangement was April 2022. The date is now scheduled for May/June 2022.

The nickel market was thrown into turmoil following a major industry participant being subject to a short squeeze, resulting in a substantial financial obligation to counterparties overnight, that may result in default. This may have a contagion effect, where other parties are also impacted by failed settlement obligations. To put this nickel price volatility into perspective, nickel was trading at US$15,000 a tonne in June 202, up from US$8931 a year earlier. The price of nickel quoted on the LME spiked above US$40,000 a tonne two weeks ago, up US$10,000 in a single day, before spiking to US$100,000 on March 8. Nickel trading on the LME has been suspended from this date.

Image: file

Implications for IGO

IGO have stated that their long-term assessment of nickel market fundamentals and the price outlook remains firm, in light of the current price volatility.

The war on Ukraine has driven oil prices to a level which has accelerated the demand for Electric Vehicles. This demand in turn significantly increases the future demand for lithium batteries as an alternative energy source to petroleum. According to Electric Vehicle manufacturer, Tesla, lithium batteries comprise 85 percent nickel. Given the International Energy Agency has forecasted that 125 million Electric Vehicles will be in use by 2030, the long-term price outlook for nickel is strong, fuelled by robust demand well into the future.

The current nickel price volatility presently has no direct material impact on IGO or its offer for Western Areas. The Western Areas takeover puts IGO on a clear pathway to building a world-class and globally relevant lithium business capable of generating significant shareholder upside in the period ahead.

This Post Market Wrap is presented by Kodari Securities, written by Michael Kodari, CEO at KOSEC.

Money

New Zealand experiences unexpected economic growth surge

New Zealand economy sees 1.1% growth in third quarter, surpassing forecasts and signalling broad recovery after earlier contraction

Published

1 day ago

December 24, 2025

Harvey Vargas

New Zealand economy sees 1.1% growth in third quarter, surpassing forecasts and signalling broad recovery after earlier contraction

In Short:
– New Zealand’s economy grew by 1.1% in Q3, exceeding expectations after a mid-year contraction.
– Fourteen industries reported gains, with business services and manufacturing leading the growth at 2.2%.

New Zealand’s economy bounced back in the third quarter, growing by 1.1% and exceeding forecasts of 0.9%. This follows a revised 1.0% contraction in Q2, signaling a clear turnaround. According to Statistics New Zealand, 14 out of 16 industries reported growth, with business services and manufacturing leading the charge. Construction also picked up, rising by 1.7%, while exports were boosted by strong dairy and meat sales.

Retail spending showed robust gains, especially in categories sensitive to interest rates, including a 9.8% increase in electrical goods and a 7.2% jump in motor vehicle parts. Despite the positive quarter-on-quarter growth, the economy was still 0.5% lower than the same period last year, with telecommunications and education the only sectors experiencing declines.

Cautiously optimistic, Reserve Bank Governor Anna Breman noted that monetary policy will continue to depend on incoming data, as financial conditions have tightened beyond earlier projections. While positive GDP numbers support current low rates, the services sector—comprising two-thirds of GDP—has contracted for 21 consecutive months, suggesting the recovery may remain uneven.

Money

US economy grows 4.3% in Q3, exceeding forecasts

US economy grows 4.3% in Q3 2025, surpassing forecasts despite inflation and shutdown challenges

Published

1 day ago

December 24, 2025

Harvey Vargas

US economy grows 4.3% in Q3 2025, surpassing forecasts despite inflation and shutdown challenges

In Short:
– The US economy grew by 4.3 percent in Q3 2025, exceeding forecasts and showing consumer resilience.
– Consumer spending rose by 3.5 percent, with increases in healthcare and recreational goods driving growth.

The US economy grew at a robust annual rate of 4.3% in Q3 2025, exceeding forecasts and marking its strongest quarterly expansion in two years. This growth comes despite lingering inflation concerns and political instability, showing that American consumers are continuing to spend and drive economic momentum.

Consumer spending, which accounts for roughly 70% of the economy, jumped 3.5% in the quarter, up from 2.5% previously. Much of this increase was fueled by healthcare expenditures, including hospital and outpatient services, along with purchases of recreational goods and vehicles. Exports surged 8.8%, while imports fell 4.7%, giving net economic activity a boost, and government spending bounced back 2.2% after a slight decline in Q2.

Remains optimistic

Despite the strong growth, inflation remains in focus. The personal consumption expenditures (PCE) price index rose 2.8%, up from 2.1%, with core PCE also climbing. Economists are closely watching the job market and tariff-related pressures. Meanwhile, the recent federal “Schumer shutdown” is expected to slow Q4 growth, potentially trimming GDP by 1 to 2 percentage points. Treasury Secretary Scott Bessent, however, remains optimistic that 2025 will still reach a 3% growth rate.

The Q3 numbers are also influencing expectations for the Federal Reserve. Analysts now see an 85% probability that interest rates will remain stable at the January 2026 meeting. Steady rates could provide a measure of certainty for investors, businesses, and consumers alike as they make decisions heading into 2026. Overall, the data paints a picture of a resilient US economy navigating both challenges and opportunities.

Money

Laurene Powell Jobs exits Monumental Sports ownership completely

Laurene Powell Jobs sells her stake in Monumental Sports & Entertainment to Arctos Partners and QIA for $7.2 billion

Published

1 day ago

December 24, 2025

Harvey Vargas

Laurene Powell Jobs sells her stake in Monumental Sports & Entertainment to Arctos Partners and QIA for $7.2 billion

In Short:
– Laurene Powell Jobs sold her stake in Monumental Sports & Entertainment to Arctos Partners and Qatar Investment Authority.
– The deal values the enterprise at £7.2 billion, ending her eight-year involvement.

Billionaire Laurene Powell Jobs has officially exited Monumental Sports & Entertainment, selling her entire stake to private equity firm Arctos Partners and the Qatar Investment Authority. The transaction values the company at $7.2 billion, ending Powell Jobs’s eight-year involvement that began in 2017.

Monumental Sports owns the NBA’s Washington Wizards, NHL’s Washington Capitals, WNBA’s Washington Mystics, Capital One Arena, and Monumental Sports Network. Arctos Partners joins as a new minority investor, while QIA increases its ownership, further solidifying its presence in U.S. sports. Ted Leonsis, founder and CEO, emphasized plans to expand the Washington, D.C. sports ecosystem and enhance fan experiences.

This deal highlights the growing influence of private equity and sovereign wealth funds in sports. Arctos Partners now holds stakes in over 25 teams, including several NBA franchises, while QIA becomes the first sovereign wealth fund to invest directly in a major U.S. sports team, leveraging NBA regulation changes.