Wyloo to buy nickel miner Noront after BHP drops off from race

(Reuters) - Billionaire Andrew Forrest's Wyloo Metals said on Wednesday it will buy Canada's Noront Resources Ltd in a deal valuing the nickel miner at C$616.9 million ($478.11 million), a day after BHP Group backed out from a months-long race.

BHP, the world's largest listed miner, said on Tuesday it would not match a takeover offer by Wyloo as it did not see "adequate long-term value" in raising its C$0.75 per share bid.

Noront agreed to Wyloo's latest cash offer of C$1.10 apiece made last week. Wyloo will also provide Noront a loan of C$29.4 million to help cover the C$17.8 million termination fee it owes BHP, the Canadian company said in its statement.

Wyloo, Noront's largest shareholder, has been locked in a takeover battle with BHP since the summer as both miners vie to secure supplies of nickel — the key battery metal used in electric vehicles.

The two even began talks with each other in November to make an arrangement, but those discussions ended this month with no agreement.

Both the companies were eyeing Noront's Eagle Nest nickel asset in Canada's so-called Ring of Fire — a high-grade deposit of the metal along with copper and palladium.

"We are under no misconceptions that this will be an overnight success," Forrest said in a statement from Wyloo.

"The journey to realise the full potential of the Ring of Fire will require patience, determination and working hand-in-hand with First Nations, federal and provincial governments, and regional stakeholders," he added.

"While the Eagle's Nest deposit is a promising resource, we do not see adequate long-term value for BHP shareholders to support an increase in BHP's offer," BHP's Chief Development Officer Johan van Jaarsveld said in a separate statement.

The two companies shall convene a special meeting of shareholders in early-2022 to vote on the plan of arrangement, Wyloo said.

($1 = 1.2903 Canadian dollars)

(Reporting by Arunima Kumar and Nikhil Kurian Nainan and Yamini C S in Bengaluru; Editing by Anil D'Silva, Aditya Soni and Uttaresh.V)