- Parties enter scheme implementation deed
- Oz Minerals shareholders to vote on takeover in late March, early April
- Berenberg says transaction ‘makes sense from strategic perspective’
Mining giant BHP’s (BHP) takeover of Oz Minerals moved towards completion overnight as the two parties entered a scheme implementation deed.
The agreement would see BHP acquire all shares in Oz at a price of A$28.25 which adds up to a deal value of A$9.6 billion. The offer price, which the Oz board had recommended to shareholders in November, represents a 49.3% premium to the Oz Minerals closing price on 5 August when BHP first made its approach.
Shares editor Daniel Coatsworth wrote on the deal when the news first broke, saying BHP would have to increase its offer to get the transaction done.
Oz shareholders are set to meet in late March or early April to vote on the takeover, which is subject to at least 75% of shareholders voting in favour. Oz Minerals is Australia’s largest listed pure-play copper miner. A flat BHP share price of £25.85 suggests investors were expecting this news.
WHAT’S BEING SAID ABOUT THE DEAL?
BHP CEO Mike Henry commented: ‘The combination of BHP and Oz Minerals’ 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.’
Investment bank Berenberg said: ‘We view this as an in-line release for BHP. The company had previously noted it was in an extended exclusivity agreement with Oz Minerals and so the news of a formal scheme is unlikely to surprise the market.
‘We are supporters of the deal and think that it makes sense from a strategic perspective.
‘At the time of writing, our in-depth note, including the Oz assets, increased our forecast BHP copper production by 11% over 2023-30, while for nickel our 2023-30 production increased by 19%. Our 2023-30 EPS (earnings per share) increased by 9%.’
Berenberg added that BHP may divest a portfolio of copper-gold assets at the Carajas mine in Brazil with Central Asian Metals (CAML:AIM) a possible bidder.
