The takeover of OZ Minerals by BHP has been a subject of intense speculation over the past week. Both companies have been interested in expanding their copper portfolio. BHP, which has the massive Olympic Dam copper hub and the Oak Dam discovery in South Australia, has also been eyeing the OZL copper assets. The companies also have nickel projects in Western Australia and Brazil.
Earlier in August, BHP Group made an unsolicited takeover bid for OZ Minerals for $5.8 billion, a 32.1% premium to the closing price of OZ Minerals on 5 August 2022. The offer was made at a time when prices of both OZ Minerals’ stock and copper had dropped from recent peaks. In a statement, OZ Minerals said the bid was too low and did not meet its objectives.
However, there are signs that BHP will make another bid for OZ Minerals. A source familiar with the situation says that BHP has received approaches from other companies, but did not name names. Other large to mid-cap companies have also been circling OZ’s shares. Morningstar director Mathew Hodge said that Glencore, Anglo American and Teck had all expressed interest in the deal.
Despite the rejection of BHP’s takeover bid, Oz Minerals still has a long runway and a good long-term outlook. The company pulled back 50-61% onto the weekly 200MA, a strong fiboancci level. If the price moves lower, it will likely signal a crash early in 2022.
The multi-billion dollar takeover bid for OZ Minerals is BHP’s biggest acquisition since selling its petroleum assets in 2017. This acquisition shows that BHP is looking to diversify its business and grow. Nickel and copper are two of the most important elements of the energy industry and are crucial in lithium-ion batteries. BHP hopes that this investment will boost its overall profitability.
The company’s management has been disappointed with the rejection of BHP’s takeover offer. While it has increased its spending on exploration and production of nickel, it still needs to buy more copper and nickel assets across the globe. While the bid was rejected, BHP’s CEO Mike Henry said it represented “compelling value” and a certainty for the company’s shareholders.
