OZ Minerals’ $418 million takeover bid for Brazil-focused Avanco Resources is a step closer to completion after OZ declared it unconditional.
Adelaide-based OZ has waived all remaining defeating conditions of the offer and is accelerating terms of payment, with Avanco shareholders, who have already accepted the offer (currently 43.5 per cent of the company’s issued capital) to be paid by June 21.
The 43.5 per cent figure increases to 46.6 per cent once commitments by Avanco management, regarding the exercise of outstanding options, are taken into consideration. The company requires 50.1 per cent of shares for the takeover to proceed.
Two of the largest shareholders that have accepted OZ’s deal include Appian (18.45 per cent of Avanco shares) and BlackRock (11.6 per cent)
OZ’s offer of $0.085 in cash and 0.009 shares in OZ per Avanco share, which has previously been referred to by some relevant parties as undervalued, is now considered final and cannot be increased by law. Under the terms of OZ’s offer, Avanco shares are valued at $0.178, a 121 per cent premium on Avanco’s last traded price of $0.077 before the offer was made at the end of March.
Avanco’s premier Brazilian operation (and OZ’s primary point of interest) is the Carajás, which hosts high-quality iron oxide copper gold (IOCG) deposits; Avanco has the second-largest land holdings in the region after Vale.
The offer, which has been extended twice, is expected to close on June 14.