The formation of a unified South Australian ‘copper basin’ may soon be a reality after the directors of Adelaide-based mining company OZ Minerals (ASX: OZL) today unanimously recommended a $9.6 billion takeover offer from BHP (ASX: BHP).
The deal, which is an improvement on a lesser bid launched by BHP in August, will see BHP own 100 per cent of OZ Minerals - a South Australian copper miner with operations in close proximity to the suitor’s major Olympic Dam mine - the planet’s fourth largest copper deposit and the largest deposit of uranium in the world.
The two entered into a scheme implementation deed today following a four-week period of due diligence. Under the terms of the agreement, OZ Minerals’ shareholders will receive $28.25 per share in cash, representing a 49.3 per cent premium to the OZL closing share price on 5 August - prior to BHP’s initial proposal.
While OZ Minerals’ directors have today unanimously backed the offer, shareholders still need to give the transaction the green light at a scheme meeting expected to be held sometime in late-March to early-April 2023 for it to become effective.
Implementation is also subject to approvals from regulators in Australia, Brazil and Vietnam, and a tick of approval from the Australian courts.
“The Scheme provides OZ Minerals shareholders with an opportunity to realise certain value for their OZ Minerals shares at a compelling premium,” OZ Minerals managing director and CEO Andrew Cole said.
“The OZ Minerals board believes that BHP’s offer appropriately reflects the quality, growth profile and strategic nature of OZ Minerals’ long-life copper and nickel assets.
“The OZ Minerals team will work closely with all of our stakeholders, including our employees, customers, suppliers and the traditional owners of the land on which we operate, to ensure their interests are prioritised should the Scheme proceed.”
BHP CEO Mike Henry expressed his excitement for the future of the merged entity.
“The combination of BHP and OZL’s assets, skills and technical expertise provides a unique opportunity not available under separate ownership, with complementary resources including the Oak Dam exploration prospect and existing facilities within close proximity, backed by BHP’s strong balance sheet, capital discipline and commitment to sustainable development,” Henry said.
“We thank the OZL Board and management for their engagement through the due diligence process and look forward to working together to continue to take steps forward to complete the transaction.”
Shares in BHP are up 0.54 per cent to $46.56 per share at 10.45am AEDT, while OZ Minerals is tracking down by 0.018 per cent to $27.78 per share.
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