PERTH (miningweekly.com) – The board of copper miner Oz Minerals will back an increased offer from diversified miner BHP.

BHP has submitted a revised non-binding indicative proposal for Oz Minerals, to acquire the company for a cash price of A$28.25 a share, valuing Oz Minerals at A$9.6-billion.

The increased offer compared with the A$25-a-share bid made by BHP in September, which had been deemed insufficient by Oz Minerals at the time.

The revised offer represented a 49.3% premium to Oz Minerals' undisturbed closing price on August 5, and a 59.8% premium to the company’s undisturbed 30-day volume weighted average share price on the same date.

Oz Minerals on Friday told shareholders that the revised proposal allowed the company to consider paying a franked dividend to shareholders prior to the transaction being implemented. The cash consideration price would be reduced by the cash component of any dividends or return of capital paid by Oz Minerals before the date of the implementation of the revised proposal.

The revised offer is subject to a number of conditions, including BHP completing a satisfactory due diligence, the entry into a scheme implementation agreement, and a unanimous recommendation from the Oz Minerals board that shareholders vote in favour of the transaction.

The takeover target told shareholders that subject to the agreement of an acceptable binding scheme implementation agreement, the Oz Minerals board intended to unanimously recommend that shareholders accept the offer as being in the best interest of shareholders, in the absence of a superior proposal and subject to an independent expert’s recommendation.

“BHP’s revised proposal is a clear reflection of Oz Minerals’ unique set of highly strategic, quality assets in quality jurisdictions and an enviable multigenerational growth pipeline of copper and nickel assets in strong demand due to global electrification. We look forward to working with BHP in a collaborative way to progress the revised proposal in the best interests of Oz Minerals and its stakeholders,” said Oz Minerals MD and CEO Andrew Cole.

BHP has indicated that the increased offer price would be its best and final price, in the absence of a competing bid.

“BHP’s proposal represents a highly compelling offer for OZL shareholders, providing certainty at a time of macroeconomic uncertainty and market volatility, and increasing risks for the industry,” BHP CEO Mike Henry said on Friday.

“The combination of BHP and Oz Mineral’s assets, skills and technical expertise provides a unique opportunity not available under separate ownership, with complementary resources including the Oak Dam exploration prospect and existing facilities within close proximity, backed by BHP’s strong balance sheet, capital discipline and commitment to sustainable development.”

BHP told its own shareholders that the proposed transaction was expected to deliver significant value creation for both companies, and would give BHP increased exposure to future facing commodities, attractive synergies through the creation of a South Australian copper basin which could unlock potential operational synergies owing to the proximity of Oz Minerals Carrapateena and Prominent Hill operations to its own Olympic Dam and Oak Dam projects, as well as offer growth options through Oz Mineral’s brownfield copper expansion projects in South Australia.

BHP told shareholder that the recently approved West Musgrave project would also add a large greenfield nickel option to BHP’s Nickel West nickel sulphide resource position in Western Australia.