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Highlights
- Shares of BHP were trading 1.377% higher today (24 November).
- BHP revised the proposal terms to acquire OZL as the board rejected the original.
- The company has offered a cash consideration of AU$28.25 per OZL share.
Shares of Australian commodities producer BHP Group Limited (ASX:BHP) were spotted trading in the green territory today (24 November) despite there being no major update from the company. One BHP share was valued at AU$44.525 as of 11:35 AM AEDT.
BHP recently announced acquisition of 100% of OZ Minerals (ASX:OZL). A few months ago, OZ Minerals Limited rejected a non-binding indicative proposal submitted by BHP on 5 August 2022. As per an ASX release from 18 November, OZ Minerals is now reconsidering the acquisition proposal from BHP under revised terms.
Today’s rise in the share price of BHP was in line with the positive performances of the S&P/ASX 300 Metal and Mining and S&P/ASX 200 Materials sectors. INDEXASX:XMM saw a gain of 55.6 points, totalling 5,922.9 points and INDEXASX:XMJ has improved by 150 points, totalling 17,529.5 points around the same time.
Share performance of BHP
Following today’s increase, shares of BHP have gained 1.85% in the last five trading sessions along with gaining 14.08% in a month. On a year-to-date (YTD) basis, BHP’s share value has gone 5.14% up and 16.53% higher over the course of a year as of 11:35 AM AEDT.
A glance at BHP’s revised terms to acquire OZ Minerals
On 8 August 2022, OZ Minerals informed the market of receiving an unsolicited, conditional non-binding indicative proposal from BHP on 5 August. The proposal stated BHP acquiring 100% of OZ Minerals’ shares for a cash consideration of AU$25 per share. However, the OZ Minerals board confirmed the rejection of the BHP proposal on the same day as it wasn’t in the best interests of OZ shareholders.
BHP submitted a revised non-indicative proposal to OZ Minerals last week on 18 November, in which it offered a cash price of AU$28.25 per share. According to BHP, this updated offer represents the best and final price the company is ready to pay for acquiring OZ Minerals.
Commenting on the revised proposal, Mike Henry, CEO of BHP Group Limited, said:
Image Source: © 2022 Kalkine Media ®
Data Source: Company announcement dated 18 November 2022
What do BHP and OZL hope to gain from this acquisition?
Benefits to BHP
- The addition of copper and nickel resources will push the exposure to future-facing commodities.
- The proximity of BHP and OZL operations will attract potential synergies.
- Several growth options with OZL’s brownfield copper and greenfield nickel projects.
Benefits to OZ Minerals
- With the BHP deal, OZL shareholders will be entitled to a premium above trading levels and average broker prices.
- Improved cash certainty.
- BHP has considered keeping most of OZL's employees, integrating them into a much bigger organisation.
