Aug 9 (Reuters) - BHP Group Ltd will likely raise
its A$8.34 billion ($5.82 billion) offer to buy Australia's OZ
Minerals, analysts said after the global miner was
rebuffed in its pursuit of the nickel-copper miner on Monday.
OZ rejected BHP's A$25 per share offer, terming it
undervalued and "opportunistic" as it was tabled when copper
prices and its stock price have fallen from recent peaks.
"While OZ's board rejected the offer based on price, this is
a strategically sensible target as it would enable BHP to unlock
more of the value from (its copper mine) Olympic Dam and would
also add to BHP's Western Australian nickel business," Jefferies
analysts said in a note.
BHP plans to zero in on battery metals like nickel and
copper to align itself with a global push towards
electrification and decarbonisation, as firms race to capitalize
on burgeoning interest in clean energy and electric vehicles.
While the companies did not say if another bid was in the
offing, analysts expect a higher offer and touted the likelihood
of a bigger takeover battle.
Brad Smoling, managing director at Smoling Stockbroking,
said other players would eye OZ's assets in light of the green
energy push, and suggested a new offer could be up to A$30 per
"Other buyers may be interested in OZ Minerals with many
miners optimistic on the outlook for copper. Potential acquirers
such as Glencore, Anglo American, Teck
Resources, and so on are in very strong financial
shape and able to bid," said Jon Mills, an equity analyst at
Mills added, however, that BHP was likely overpaying for the
deal at the current price, though that would not deter it from
making another approach.
"If BHP revises its offer price by another 20% to 25% then
the OZL board may accept the offer," said Kunal Sawhney, chief
executive officer of Kalkine Media.
($1 = 1.4331 Australian dollars)
(Reporting by Shashwat Awasthi and Tejaswi Marthi; Editing by