The Brazilian competition regulator has given the green light to BHP’s $9.6 billion takeover of OZ Minerals, though some shareholders may still hold out for a better deal.
Brazil’s Administrative Council for Economic Defence last week provided clearance for BHP to acquire 100 per cent of the shares in OZ Minerals.
“As a result, the condition precedent regarding Brazilian competition approval has now been satisfied,” OZ said in a statement.
OZ Minerals has a number of operations in Brazil, including the Santa Lúcia iron oxide copper-gold mineral deposit, the Antas copper-gold mine, and CentroGold, one of the largest undeveloped gold projects in Brazil.
The OZ board has unanimously recommended its shareholders approve the BHP offer.
However, since BHP first announced its desire to acquire OZ in August last year, the price of copper price has risen 20 per cent, from $US3.55 per pound up to $US4.27. This has led some shareholders to indicate they will vote against the existing deal.
“The reality of the situation is that the BHP offer now looks a little anaemic,” David Franklyn of Argonaut Funds Management wrote on January 30.
Franklyn believes OZ’s portfolio of future-facing resources, especially copper, is especially attractive as the world moves towards decarbonisation.
“We view OZ Minerals as one of the best exposures to the global copper market and see no reason to sell out cheaply to BHP,” he wrote.
BHP’s takeover of OZ Minerals has been a long and winding road. The mining giant won over the OZ Minerals board with an offer of $28.25 per share, valuing the copper miner at $9.63 billion, in November. The accepted offer was up from its initial takeover bid of $25 per share ($8.4 billion) in August 2022, which the OZ board swiftly rejected.
News of the successful bid came after it was reported the two companies had renewed their talks in mid-November, following months of suggestions they would not be returning to the negotiating table.
The acquisition gives BHP access to OZ Minerals’ significant portfolio of future-facing minerals – namely copper and nickel – that are vital to the world’s push for clean energy.
The $28.25-per-share offer represented a 49 per cent premium on OZ Minerals’ share price prior to BHP’s initial bid in August.
A scheme booklet is expected to be sent to OZ Minerals shareholders in early March, followed by a shareholder vote in early April.