Australian resources firm BHP has raised its takeover offer for Adelaide-based copper and nickel producer Oz Minerals to the equivalent of A$9.6bn ($6.4bn), putting it on course to acquire the firm.
BHP has revised the offer price up by 13pc to A$28.25/share from A$25/share in its original offer. "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," BHP said. The revised price corresponds to an enterprise value of A$9.6bn for Oz Minerals.
Oz's board said it intends to "unanimously recommend" the revised proposal, after rejecting a previous offer in August for undervaluing its strategic assets.
The revised $28.25 bid was at a 49.3pc premium to Oz Mineral's closing price of A$18.92/share on 5 August, the last trading day before BHP's initial proposal, and a 59.8pc rise from Oz Mineral's 30-day volume-weighted average price of A$17.67/share up to and including 5 August.
The acquisition would benefit BHP as it will "add copper and nickel resources that are essential to support the global megatrends of decarbonisation and electrification", BHP said.
BHP, which last year lost out to unlisted Wyloo Metals in a nickel-focused takeover bid for Canada's Noront Resources, is keen to bulk up its nickel assets in Australia and has acquired an interest in the Kabanga nickel project in Tanzania.
BHP is a leading copper producer in the world, owning copper assets Escondida and Pampa Norte in Chile, Antamina in Peru and Olympic Dam in Australia. Its copper production during July-September reached 410,100t, while its output guidance for 2022-23 remains at 1.635mn-1.825mn t. BHP's nickel output from its nickel asset Nickel West operation in Western Australia totalled 20,700t in July-September, with 2022-23 fiscal year guidance at 80,000-90,000t.
Oz Mineral operates copper mines Carapateena and Prominent Hill in South Australia, Carajas in Brazil and copper-nickel project West Musgrave in Western Australia. The company produced 87,757t of copper in 2022's first nine months, with its 2022 copper output guidance at 120,000-135,000t.
Construction at West Musgrave will start in November after a final investment decision was approved in September. The project is expected to produce its first concentrate in the second half of 2025. Output is estimated at 35,000 t/yr of nickel and 41,000 t/yr copper in the first five years, moderating to 28,000 t/yr of nickel and 35,000 t/yr of copper over a mine life of 24 years.
