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
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.
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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.
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.
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