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Oz Minerals Target : BHP Takeover Play

Copper and Nickel are two critical elements for the green and clean energy revolution, now one of the world’s biggest players wants a lot more of it.

BHP, the A$200 billion Melbourne based monster, has decided to go after South Australia’s Oz Minerals in a $25 a share cash deal.

Shareholders of the company would have woken up Monday delighted with the news.

Copper inventories continue to fall year over year, spot prices remain historically high.

Oz Minerals rejected the unsolicited proposal.

“We have a unique set of cooper and nickel assets, all with strong long-term growth potential in quality locations,” Oz Minerals managing director Andrew Cole told the market.

“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 board of Oz Minerals went on to say:

The Board considered that the Indicative Proposal does not adequately compensate shareholders for:
• the unique nature of OZ Minerals’ core business, which represents a high-quality portfolio of copper and nickel assets, located in a Tier 1 mining jurisdiction with long mine lives, first quartile cost positioning and extensive strategic optionality
• the unique investment proposition which OZ Minerals provides as the only primary copper company in the ASX100
• the low carbon intensity of OZ Minerals’ assets relative to its peers with a defined and market-leading plan for further decarbonisation to meet our target of net zero Scope 1 and 2 operational emissions by 2030
• the high-quality nature of OZ Minerals’ growth projects which include the West Musgrave Projected for H2 2022), the Carrapateena Block Cave and the Prominent Hill extension which together are expected to generate significant production growth over the next 5 years
• the strong long-term outlook for both the copper and nickel markets underpinned by increasing geological scarcity, global electrification and accelerating decarbonisation, to which OZ Minerals is highly leveraged
• the strong and consistent returns that the OZ Minerals management team has delivered with a total shareholder return of about 145 per cent over the past five years.

Oz Minerals shares were trading at $25.47 late Monday trade, up 35% on the day.

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