Australian multinational mining, metals and petroleum company BHP Group’s Rs. 35,000 crore ($5.8 billion) takeover bid has been rejected by OZ Minerals. The Group was aiming to secure copper and nickel assets for a shift into clean energy and the electric vehicles (EVs) market.
As per OZ Minerals, the offer undervalued the nickel and copper miner and was “opportunistic” as it comes when copper prices and its stock price have fallen from recent peaks. They said that the offer was unsolicited, conditional and non-binding indicative.
The move underlines BHP’s intention to diversify into metals like copper – essential across the energy sector for wind turbines, solar power systems and electric cables – as well as nickel that is used in lithium-ion batteries for EVs.
OZ is mining minerals that are in strong demand particularly for “global electrification and decarbonisation” and “we do not consider the proposal from BHP sufficiently recognises these attributes”, OZ Chief Executive Andrew Cole said.
BHP’s offer marked a 32% premium to the closing price of OZ shares on Friday, when the latter had a market capitalisation of A$6.3 billion, according to Refinitiv Eikon.
“OZL is one of only a handful of global copper pure-play companies,” Dylan Kelly, senior research analyst at Sydney-based brokerage Ord Minnett, said in a note to clients.
“This suggests another party with a more positive view on long-term copper, may be willing to pay more than BHP even if it doesn’t have an Aussie presence,” Kelly said, adding a prolonged sales process could yield a slightly higher price.
OZ did not comment on whether they have any offers from other interested parties, but said that any bids that may come through would be assessed by its board.
BHP did not say if it would make a revised offer.