BHP Group Shot Down in $5.8 Bln bid for Copper Miner Oz Minerals

Australian copper mining firm OZ Minerals Ltd (ASX:OZL) on Monday rejected an A$8.4 billion (5.8 billion dollar) takeover offer from BHP Group (ASX:BHP), saying it "significantly undervalued" the firm.

Earlier on Monday, BHP offered A$25 per share for Oz Minerals, a 32.1% premium to last week's close. The world's largest miner wants to expand its copper interests by acquiring Oz Minerals' Carrapateena and Prominent Hill projects in South Australia. However, Oz Minerals' board rejected the offer, saying it did not recognize the growth potential of its copper and nickel assets. "We mine minerals in strong demand, particularly for the global electrification and decarbonization theme, and have a long-lived Resource and Reserve base. We do not believe BHP's offer adequately takes these characteristics into account," Oz Minerals CEO Andrew Cole said in a statement. The company also disclosed that BHP holds less than a 5% stake through derivative instruments. BHP's offer comes at a volatile time for copper prices, which have fallen significantly in the face of slowing industrial growth around the world. Oz Minerals shares have lost more than 40% so far this year as a series of COVID lockdowns in major importer China have severely dampened copper demand. But that trend is expected to change drastically in the second half of 2022 as the country offers more stimulus to support economic growth. BHP is seeking to diversify its interests beyond its main iron ore exports by expanding its presence in copper. Much of the firm's copper production comes from its Escondida mine in Chile, which has been the subject of a series of labor strikes in recent years. BHP CEO Mike Henry said in a statement that he was "disappointed" that Oz Minerals rejected the offer. Demand for copper and nickel is expected to grow in the coming years due to their wide use in electric vehicles and lithium-ion batteries.   Source: investing.com