It rejects last-minute unsolicited US$1.2b refinancing proposal from Canadian bank
9 June 2009
(SYDNEY) Australian miner OZ Minerals will stick with a plan to sell most of its assets to China’s Minmetals and reject a last-minute alternative proposal.
The debt-laden miner said it would not pursue an unsolicited US$1.2 billion refinancing proposal from Royal Bank of Canada (RBC) and RFC Group made on Friday because the Minmetals proposal offered better value.
‘We certainly had a very close look at their proposal, we have taken independent advice. We concluded it ... doesn’t have any prospect of becoming a superior proposal,’ OZ Minerals business support general manager Bruce Loveday said.
Mr. Loveday also said the RBC-RFC proposal ‘wasn’t sufficiently certain’.
The proposal by Minmetals has already been approved by the Australian government and is due to go to a shareholder vote on Thursday.
Mr. Loveday said that should the Minmetals transaction be voted down, OZ Minerals would run ‘a very high risk of receivership’.
RFC managing director Rob Adamson said his consortium had extended its offer for OZ Minerals until close-of-business on Thursday, so the company’s shareholders would have an opportunity to consider it.
‘Should shareholders of OZ Minerals reject the Minmetals offer, the OZ Minerals board will still have the option of pursuing our recapitalisation proposal,’ Mr. Adamson said.
Canberra approved Minmetals’ US$850 million offer after the Chinese firm adjusted it to exclude OZ’s flagship Prominent Hill mine because it was located near a military rocket testing range in South Australia.
Had the deal failed, it would have been the second Chinese offer related to Australia’s resources sector to have soured in less than a week, after Rio Tinto last Friday dumped a planned tie-up with Chinalco.
Rio rejected Chinalco’s US$19.5 billion offer for an improved stake in the mining giant, saying improved commodity prices meant a rights issue and a joint venture with former rival BHP Billiton were more appealing.
OZ Minerals, formed by the merger of Oxiana Ltd and Zinifex Ltd last year, needs to pay about US$1.1 billion of debt after a rout in commodity prices. Minmetals, China’s biggest metals trader, is seeking to complete the purchase of mines from OZ Minerals next month, giving it control of the world’s second-biggest zinc mine and supplies of copper, gold and nickel.
RFC’s Mr. Adamson said in his statement: ‘We believe our proposal provides the OZ Minerals board with the value, certainty and timing the company needs.’ Some of OZ Minerals’s largest shareholders have indicated they will support RFC’s proposal, he said.
OZ Minerals rose 1.7 per cent to 88.5 Australian cents at the June 5 close on the Australian stock exchange which was closed yesterday.
The stock has risen 61 per cent this year, giving the company a market value of A$2.76 billion (S$3.18 billion).
OZ Minerals agreed to the sale in April after the Australian government rejected a full takeover bid by Minmetals. It owns the A$1.2 billion Prominent Hill copper mine in South Australia state.
Minmetals was blocked from buying Prominent Hill by Australian Treasurer Wayne Swan in March because of its proximity to the Woomera weapons testing range. Woomera, about the size of England, is the largest land-locked missile-testing range in the world and previously included testing for nuclear weapons, according to its website
The Oz Minerals board rejected the counter offer, put together by about 20 institutions, to state-owned China Minmetals’s US$1.2 billion bid because it undervalued the Australian mining company, the Sydney Morning Herald reported yesterday on its website\. \-- AFP, Bloomberg
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OZ Minerals sticking to Chinese deal
It rejects last-minute unsolicited US$1.2b refinancing proposal from Canadian bank
9 June 2009
(SYDNEY) Australian miner OZ Minerals will stick with a plan to sell most of its assets to China’s Minmetals and reject a last-minute alternative proposal.
The debt-laden miner said it would not pursue an unsolicited US$1.2 billion refinancing proposal from Royal Bank of Canada (RBC) and RFC Group made on Friday because the Minmetals proposal offered better value.
‘We certainly had a very close look at their proposal, we have taken independent advice. We concluded it ... doesn’t have any prospect of becoming a superior proposal,’ OZ Minerals business support general manager Bruce Loveday said.
Mr. Loveday also said the RBC-RFC proposal ‘wasn’t sufficiently certain’.
The proposal by Minmetals has already been approved by the Australian government and is due to go to a shareholder vote on Thursday.
Mr. Loveday said that should the Minmetals transaction be voted down, OZ Minerals would run ‘a very high risk of receivership’.
RFC managing director Rob Adamson said his consortium had extended its offer for OZ Minerals until close-of-business on Thursday, so the company’s shareholders would have an opportunity to consider it.
‘Should shareholders of OZ Minerals reject the Minmetals offer, the OZ Minerals board will still have the option of pursuing our recapitalisation proposal,’ Mr. Adamson said.
Canberra approved Minmetals’ US$850 million offer after the Chinese firm adjusted it to exclude OZ’s flagship Prominent Hill mine because it was located near a military rocket testing range in South Australia.
Had the deal failed, it would have been the second Chinese offer related to Australia’s resources sector to have soured in less than a week, after Rio Tinto last Friday dumped a planned tie-up with Chinalco.
Rio rejected Chinalco’s US$19.5 billion offer for an improved stake in the mining giant, saying improved commodity prices meant a rights issue and a joint venture with former rival BHP Billiton were more appealing.
OZ Minerals, formed by the merger of Oxiana Ltd and Zinifex Ltd last year, needs to pay about US$1.1 billion of debt after a rout in commodity prices. Minmetals, China’s biggest metals trader, is seeking to complete the purchase of mines from OZ Minerals next month, giving it control of the world’s second-biggest zinc mine and supplies of copper, gold and nickel.
RFC’s Mr. Adamson said in his statement: ‘We believe our proposal provides the OZ Minerals board with the value, certainty and timing the company needs.’ Some of OZ Minerals’s largest shareholders have indicated they will support RFC’s proposal, he said.
OZ Minerals rose 1.7 per cent to 88.5 Australian cents at the June 5 close on the Australian stock exchange which was closed yesterday.
The stock has risen 61 per cent this year, giving the company a market value of A$2.76 billion (S$3.18 billion).
OZ Minerals agreed to the sale in April after the Australian government rejected a full takeover bid by Minmetals. It owns the A$1.2 billion Prominent Hill copper mine in South Australia state.
Minmetals was blocked from buying Prominent Hill by Australian Treasurer Wayne Swan in March because of its proximity to the Woomera weapons testing range. Woomera, about the size of England, is the largest land-locked missile-testing range in the world and previously included testing for nuclear weapons, according to its website
The Oz Minerals board rejected the counter offer, put together by about 20 institutions, to state-owned China Minmetals’s US$1.2 billion bid because it undervalued the Australian mining company, the Sydney Morning Herald reported yesterday on its website\. \-- AFP, Bloomberg
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