CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

BHP OZ Minerals takeover: OZL share price remains below offer price despite board accepting $6.34bn bid

By Jenny McCall

12:35, 18 November 2022

BHP CEO Mike Henry (far left) discussing plans with government officials
BHP CEO Mike Henry (pictured far left) discussing the companies plans with Australian PM Anthony Albanese (pictured second to the right)

Australian mining giant, BHP Group (BHP) has upped the ante and made an improved offer bid on Friday to takeover OZ Minerals (OZL). OZL's share price rose 3% on Friday on news of the impending acquisition.

The OZL share price has been up 44% since August, when BHP first started to take an interest in the group. 

BHP, which is known for its mining of copper for renewable energy and nickel for electric vehicles, returned to the negotiating table, after the OZL board rejected BHP’s last offer made in August for A$25 (US$16.80) per share, stating it was too low.

What is your sentiment on BHP?

56.32
Bullish
or
Bearish
Vote to see Traders sentiment!

BHP Group (BHP) share price chart

BHP returned after its offer was rejected

After its rejection back in the summer, BHP refused to give up and has now increased the bid by 13%, which may have won over the OZL board, even before shareholders vote on the takeover.

The new offer is for A$9.6 billion ($6.4 billion) and will see BHP acquire copper producer OZ Minerals Ltd, as BHP seeks more exposure to rising demand from clean energy and electric cars.

“BHP has submitted a revised non-binding indicative proposal to the Board of OZ Minerals Limited to acquire 100% of OZL by way of a scheme of arrangement for a cash price of A$28.25 per OZL share,” a BHP statement said.

“This offer price represents the best and final price BHP is willing to offer under the Revised Proposal, in the absence of a competing proposal,”

But despite OZL stock price being up today, it remains below the BHP offer price and currently OZL share price sits at A$27.38.

US100

19,667.90 Price
-0.630% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 1.8

Gold

2,453.28 Price
-0.180% 1D Chg, %
Long position overnight fee -0.0196%
Short position overnight fee 0.0114%
Overnight fee time 21:00 (UTC)
Spread 0.30

XRP/USD

0.57 Price
-9.470% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

ETH/USD

3,394.98 Price
-0.500% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

Global copper market set to soar

Nevertheless, analysts believe this deal will benefit BHP greatly.

BHP, which wants more exposure to copper, will reap the rewards of this deal. JPMorgan projects the metal could make up 40% of BHP’s earnings by 2030, from 25% in 2024.

BHP has big ambitions to add more future-facing minerals into its portfolio and to help decarbonise the lobal economy.

Acquiring OZ minerals will enable it to do this.

The global copper market is on a upward trajectory and was valued at $283.4bn in 2021, and it is expected to reach $394.21bn metric tons by 2029 with a CAGR of 4.21% during the forecast period, according to data. 

If this deal does go through, it will be one of the company's largest acquisitions since the $12.1bn purchase of Petrohawk Energy Corp in 2011.

BHP’s bid to take over OZL has yet to be agreed or approved by shareholders, but what this offer does represent is a strong desire for companies, like BHP to widen the scope of what it currently offers. 

Markets in this article

BHP
BHP Group
56.32 USD
-0.66 -1.160%

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 630,000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading