Adelaide’s OZ Minerals rejects $8.3bn takeover offer from BHP

Adelaide’s OZ Minerals rejects $8.3bn takeover offer from BHP

Photo via OZ Minerals

An $8.3 billion takeover offer from mining giant BHP Group (ASX: BHP) has been rejected by Adelaide-based OZ Minerals (ASX: OZL) today, with the target claiming the proposal “significantly undervalues” the company.

Announced today, the proposal would have seen BHP acquire OZ Minerals for cash consideration of $25 per share, representing a premium of 32.1 per cent to OZL’s closing price of $18.92 per share on 5 August.

However, the deal does not reflect the full value of OZ Minerals’ copper and nickel assets and the low carbon intensity of its mining projects, according to the target.

In addition, OZL claims the indicative proposal is “highly opportunistic”, and comes at a time when the price of copper and the company’s share value have fallen from recent peaks in March and January respectively.

“We have a unique set of copper and nickel assets, all with strong long-term growth potential in quality locations,” OZ Minerals managing director and CEO Andrew Cole says.

“We are mining minerals that are in strong demand particularly for the global electrification and decarbonisation thematic and we have a long-life resource and reserve base.

“We do not consider the proposal from BHP sufficiently recognises these attributes”.

The company’s board also says the proposal does not adequately compensate shareholders for OZL’s position as the only primary copper company in the ASX100, the high quality nature of its growth projects, the long-term outlook for both the copper and nickel markets and the strong and consistent returns the company has delivered over the past five years.

OZ Minerals adds that a takeover will deliver “significant synergies” to BHP, which are not reflected by the mining giant’s proposal, including operational synergies in South Australia and Western Australia, and the “significant growth and diversification opportunity" OZL represents for the suitor’s global copper portfolio.

“OZ Minerals shareholders do not need to take any action in relation to the Indicative Proposal,” OZL says.

“The OZ Minerals board and management team acknowledge the strong ongoing support it has received from its stakeholders to date and will continue to work with them on building a best-in-class global copper business with the objective of maximising long-term shareholder value.”

In response to OZL’s rejection, BHP’s CEO Mike Henry says he is “disappointed”.

“Our proposal represents compelling value and certainty for OZ Minerals shareholders in the face of a deteriorating external environment and increased OZL operational and growth related funding challenges,” Henry says.

“We are disappointed that the board of OZL has indicated that it is not willing to entertain our compelling offer or provide us with access to due diligence in relation to our proposal.”

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Looking for a credit or charge card that’s built for your business? Try American Express
Partner Content
A good credit card should work for you, not against you, and let you and your business ...
American Express
Advertisement

Related Stories

Twiggy takes hands-on role at Fortescue as new leaders appointed to green hydrogen business

Twiggy takes hands-on role at Fortescue as new leaders appointed to green hydrogen business

Fortescue Metals Group (ASX: FMG) has announced a major restructure...

Incannex completes $124m acquisition of US biotech APIRx

Incannex completes $124m acquisition of US biotech APIRx

Leading Australian medicinal cannabis company Incannex (ASX: IHL) h...

Creso Pharma to purchase Health House International in deal worth $4.6m

Creso Pharma to purchase Health House International in deal worth $4.6m

Just over a month after the collapse of Health House Internati...

Genex Power rejects $320m bid by Farquhar’s Skip Investments

Genex Power rejects $320m bid by Farquhar’s Skip Investments

Atlassian co-founder Scott Farquhar is going to have to dig deeper ...