Australian nickel and lithium miner IGO Ltd said on Monday its A$1.10 billion takeover of Western Areas would be delayed due to the recent volatility in nickel prices after Russia's invasion of Ukraine.
Shares of IGO slid as much as 7.5per cent after the company said it would now close the deal by May or June, compared with its earlier expectation of early May. The delay comes as the London Metal Exchange suspended nickel trading last week after prices doubled to more than $100,000 per tonne on supply worries following Western sanctions on major producer Russia.
IGO acknowledged the short-term volatility in the LME nickel market and price, but said its valuation of Western Areas and long-term view of the nickel market fundamentals were unchanged. It also said it would not increase its current A$3.36 per share cash offer for Western Areas. Western Areas separately said it was considering the implications of the volatility on market expectations for medium- to long-term prices.