By Nick Toscano
Mining giant BHP has been given another week to finalise the terms of its $9.6 billion takeover of Australian copper and nickel producer Oz Minerals after the companies agreed to an indicative deal in November.
The board of Adelaide-based Oz Minerals said an exclusivity period for negotiations on the takeover, due to expire this week, had been extended to December 27 after BHP confirmed it had completed due diligence.
Oz Minerals’ open-pit copper mine at Prominent Hill.Credit: Bloomberg
“The extension allows for finalisation of an agreement of the binding scheme implementation deed,” said the board, which intends to recommend the proposal unanimously.
BHP, the largest Australian mining company, has been looking to acquire Oz Minerals as part of its accelerating efforts to boost its supplies of copper and nickel, two minerals the world needs much more of in coming years to build electric cars and clean energy infrastructure. BHP last month sweetened its bid to buy Oz Minerals from $25 a share to $28.25 a share. Its revised offer valued the company at $9.6 billion.
Oz Minerals has two copper and gold mines in South Australia – Carrapateena and Prominent Hill – located either side of BHP’s vast Olympic Dam mining hub. BHP believes it can unlock significant potential cost savings by combining those assets.
Oz Minerals also has plans to build a new nickel and copper mine at West Musgrave in Western Australia, which could build on BHP’s expansive nickel position in the state.
Based on long-term price forecasts, copper could make up more than 40 per cent of BHP’s earnings by 2030, according to analysts. “This would support the strategy to have about 50 per cent of the portfolio, longer term, made up from copper, nickel and potash,” investment bank JP Morgan said.
In a market announcement on Tuesday morning, Oz Minerals said the terms of any takeover deed remained subject to the approval of its shareholders and BHP’s board, and there was no certainty yet that the deal would proceed.
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