OZ sale could save jobs

Despite some voices of dissent that are wary of a Chinese state-owned company acquiring a large stake in another Australian company, Minmetals $2.6 billion takeover offer for OZ Minerals will help ensure Australian jobs, OZ managing director Andrew Michelmore said.

Despite some voices of dissent that are wary of a Chinese state-owned company acquiring a large stake in another Australian company, Minmetals $2.6 billion takeover offer for OZ Minerals will help ensure Australian jobs, OZ managing director Andrew Michelmore said.

“Minmetals has confirmed that it intends to continue to operate current OZ Minerals operations which, in turn, will benefit employees and relevant local communities and also provide certainty to businesses beyond those operated by OZ Minerals,” he said.

The cash offer was for 82.5c per share, which represents a premium of 50% to the last traded price of OZ Minerals on 27 November 2008.

The company, which had been struggling to re-finance US$560 million of debt by the end of the month, will now have its outstanding balances paid by Minmetals.

South Australian Premier Mike Rann agrees with the idea that the move could help to save Australian jobs, with the takeover guaranteeing the State’s Prominent Hill project will go ahead.

“When you’ve got an Australian mining company that’s in trouble, this might be the salvation of that,” Rann told the ABC.

“There has been all this speculation that Prominent Hill might be shelved, it might just be put under care and maintenance.

“This way it guarantees there will be an opening in May.”

According to OZ Minerals chairman Barry Cusack, this is the best deal that the company could expect to receive under the current circumstances.

“The Board has determined that Minmetals’ cash proposal is in the best interests of OZ Minerals’ shareholders and believes this is the best outcome for shareholders compared with any of the other options available to us,” he said.

“It provides shareholders with a significant premium to the last price at which our shares traded.

“It is also significantly higher than the price at which we believe OZ Minerals shares would trade in the absence of the offer.”

OZ Minerals also announced that the trading suspension on its shares that had been in place since November 2008 has been lifted, which saw a 17% increase to 64.5c at yesterday’s close of trade on the Australian Securities Exchange.

The company is proceeding with its previously announced sale program in relation to its Martabe and Golden Grove assets.

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