Australia's OZ Minerals backs BHP's improved $6.4 bln offer

"The intention of the OZ Minerals board is to unanimously recommend the revised proposal as being in the best interests of OZ Minerals' shareholders in the absence of a superior proposal." BHP plans to splash cash on nickel exploration over the next two years and a deal with OZ would give it access to projects, including the West Musgrave copper-nickel operation in Western Australia.

Australia's OZ Minerals Ltd said on Friday it will back global miner BHP Group Ltd's improved A$28.25 per share takeover offer, which represents an enterprise value of A$9.60 billion ($6.42 billion) for the copper miner. The new offer was at a 7.4% premium to OZ Minerals' last close and higher than the A$25 per share proposal rejected in early August as "opportunistic" and undervalued.

"After carefully assessing the Revised Proposal, the board of OZ Minerals has agreed to grant BHP the opportunity to conduct due diligence for four weeks on an exclusive basis," OZ Minerals said. "The intention of the OZ Minerals board is to unanimously recommend the revised proposal as being in the best interests of OZ Minerals' shareholders in the absence of a superior proposal."

BHP plans to splash cash on nickel exploration over the next two years and a deal with OZ would give it access to projects, including the West Musgrave copper-nickel operation in Western Australia. OZ said in September it would invest more than $1 billion in West Musgrave, which is expected to produce about 35,000 tonnes of nickel and 41,000 tonnes of copper on average annually in the first five years of production.

The deal comes at a time of strong demand for battery metals amid surging popularity of electric vehicles, and as buyout activity ramps up, emphasised by Rio Tinto's recent play for Canada's Turquoise Hill to gain control of its giant copper mine in Mongolia. It also allows BHP to consolidate is copper position in South Australia, where OZ's copper mines Prominent Hill and Carrapateena lie next door to BHP's Olympic Dam mine and smelting operations. ($1 = 1.4948 Australian dollars)