By Rhiannon Hoyle


ADELAIDE, Australia--Oz Minerals Ltd. on Monday rejected a nonbinding takeover proposal from BHP Group Ltd. that values the Australian copper-and-gold mining company at almost 8.4 billion Australian dollars (US$5.8 billion), calling the approach highly opportunistic following a fall in copper prices.

Adelaide-based Oz Minerals said it received on Friday the unsolicited and conditional proposal from the world's largest mining company by market value to acquire its shares for A$25.00 each. Its stock last traded at A$18.92 a share.

BHP already has a stake of less than 5%, the company said.

The mining giant has been seeking to expand its footprint in copper, predicting demand for the industrial metal will double over the next 30 years as it is used to support renewable technologies and decarbonization goals.

BHP said the proposed price was a 41% premium to the stock's 30-day volume-weighted average and materially above average broker price targets.

"We are disappointed that the board of OZL has indicated that it is not willing to entertain our compelling offer or provide us with access to due diligence in relation to our proposal," BHP Chief Executive Mike Henry said in a statement.

But Oz Minerals said its board unanimously agreed the proposal significantly undervalues the company, which neared A$30 a share early this year on strong copper prices. Copper hit record highs earlier this year partly because of supply concern related to the war in Ukraine and sanctions on Russia, a metals producer.

Prices for copper, used in everything from construction to electronics, have since fallen to their lowest level in nearly two years as investor concerns about an economic slowdown intensify.

"The indicative proposal is highly opportunistic and has come at a time when the LME [London Metal Exchange] copper price and Oz Minerals share price have fallen from their recent peaks in March and January respectively," Oz Minerals said.

The company's stock has traded above the proposed offer price for the equivalent of more than five of the past 12 months, said Oz Minerals, which also highlighted it owns copper and nickel assets with low costs and the potential for strong growth.

"We are mining minerals that are in strong demand particularly for the global electrification and decarbonization thematic and we have a long-life resource and reserve base," said Chief Executive Andrew Cole. "We do not consider the proposal from BHP sufficiently recognizes these attributes."


Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com


(END) Dow Jones Newswires

08-07-22 2002ET