OZ Minerals Ltd (ASX: OZL) rejected BHP Group’s $5.8 billion buyout bid on Monday, saying it “seriously undervalues” the company.
BHP offered A$25 per Oz Minerals share, a 32.1% premium to last week’s closing. The world’s largest miner may buy Oz Minerals’ Carrapateena and Prominent Hill properties in South Australia.
The deal was turned down by Oz Minerals’ board of directors, who said that the company could do more with its copper and nickel assets.
We extract minerals in high demand for global electrification and decarbonization and have a large resource and reserve base. Oz Minerals CEO Andrew Cole said BHP’s bid doesn’t recognize these qualities.
Through derivatives, BHP built a less than 5% ownership interest in the firm.
BHP’s offer comes as copper prices decrease due to weakening global industrial development.
Oz Minerals’ shares have fallen over 40% this year due to COVID lockdowns in key copper importer China.
This trend is expected to change in 2022 as the government gives out more stimulus to help the economy grow.
BHP is growing its copper business to diversify its iron ore exports. The Escondida mine in Chile has been hit by worker strikes in recent years.
BHP’s rejection of Oz Minerals’ bid “disappointed” BHP CEO Mike Henry.
Copper and nickel are used in electric vehicles and lithium-ion batteries, so demand could rise.
