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OZL - Oz Minerals

Sean K

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BHP ANNOUNCES NON-BINDING INDICATIVE PROPOSAL TO ACQUIRE OZ MINERALS LIMITED​


BHP has submitted a non-binding indicative proposal to the Board of OZL on 5 August 2022
to acquire 100% of the issued share capital in OZL by way of a scheme of arrangement (the
Proposal).
BHP’s Proposal to acquire all of OZL’s shares for cash consideration of A$25.00 per share1
,
represents a compelling value proposition for OZL shareholders. The consideration represents
an attractive premium of:
• 32.1% to OZL’s closing price of A$18.92 per share on 5 August 2022; and
• 41.4% to OZL’s 30-day VWAP of A$17.67 per share up to and including 5 August 2022.
BHP’s Proposal represents a significant premium to the market value of OZL at the time the
Proposal was submitted, at a price that was materially above the average broker price targets.
The cash offer would deliver immediate value to OZL shareholders and de-risk any value which
may (or may not) eventually be reflected in OZL’s share price.
BHP’s Proposal is subject to certain conditions including completion of confirmatory due
diligence to the satisfaction of BHP, entry into a scheme implementation agreement and a
unanimous recommendation from the OZL Board that OZL shareholders vote in favour of the
Proposal in the absence of a superior proposal.
BHP CEO Mike Henry said:
“Our proposal represents compelling value and certainty for OZ Minerals shareholders in the
face of a deteriorating external environment and increased OZL operational and growth related
funding challenges.
“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.”


============================================================

DYOR

i hold OZL ( 'free-carried' ) and BHP

am not particularly attracted to an all cash offer

Topping up on weakness on this puppy might have been a good idea. :)
 
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I am. I love cash.
Mick


my notional SP is $5.17 ( have rescued the actual investment cash a while back )

DIVIDEND TYPEDIVIDEND AMOUNT ($)FRANKEDEX-DIV DATEPAY DATE
Final0.180100.00%24/02/202211/03/2022
Interim0.160100.00%23/08/202107/09/2021
Final0.170100.00%11/03/202126/03/2021
Interim0.080100.00%17/09/202005/10/2020
Final0.150100.00%11/03/202026/03/2020
Interim0.080100.00%02/09/201917/09/2019
Final0.150100.00%11/03/201926/03/2019
Interim0.080100.00%31/08/201817/09/2018
Final0.140100.00%09/03/201826/03/2018
Interim0.060100.00%06/09/201721/09/2017
Final0.140100.00%09/03/201724/03/2017

not exactly eye-watering returns .. but considering the investment cash is parked elsewhere .. ( and that franking is always useful )
 
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This copper bull is happy to see the bid for a short term gain but disappointed to miss out on another 30% in the medium term. The bid has sparked demand in the other Cu miners though.

Edit: I've sold half at 25.50 and will hold the remainder for a higher offer near $29.
 
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This copper bull is happy to see the bid for a short term gain but disappointed to miss out on another 30% in the medium term. The bid has sparked demand in the other Cu miners though.

Edit: I've sold half at 25.50 and will hold the remainder for a higher offer near $29.
Smart strategy.
I also sold half, and just going to sit on the rest to see what happens.
Mick
 

greggles

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Interesting that Mike Henry has claimed that OZL are not providing BHP access to due diligence in relation to the offer. Looks like OZL are stonewalling the proposal completely and making things as difficult for BHP as they can, which is probably a good idea if they believe the offer undervalues the company.

Those shareholders who are happy with the $25 BHP are offering can exit today for more than that. With OZL currently trading at $25.51 the market is clearly of the view that BHP will either fail in the takeover or be forced to pay more for OZL.
 
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my notional SP is $5.17 ( have rescued the actual investment cash a while back )

DIVIDEND TYPEDIVIDEND AMOUNT ($)FRANKEDEX-DIV DATEPAY DATE
Final0.180100.00%24/02/202211/03/2022
Interim0.160100.00%23/08/202107/09/2021
Final0.170100.00%11/03/202126/03/2021
Interim0.080100.00%17/09/202005/10/2020
Final0.150100.00%11/03/202026/03/2020
Interim0.080100.00%02/09/201917/09/2019
Final0.150100.00%11/03/201926/03/2019
Interim0.080100.00%31/08/201817/09/2018
Final0.140100.00%09/03/201826/03/2018
Interim0.060100.00%06/09/201721/09/2017
Final0.140100.00%09/03/201724/03/2017

not exactly eye-watering returns .. but considering the investment cash is parked elsewhere .. ( and that franking is always useful )
Well decided to sell at market: 25.68$
And get the cash in hand earlier.we could see a bidding war..who knows but i can reinvest profit tomorrow in a loser😁
 
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am watching AIS climb a little ( a paltry 10% )

am tempted to crunch the numbers and see if i should reduce the holding ( i bought the last parcel @ 38 cents while trading deferred settlement )
 
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Another shrewd call from James Gerrish as published on Livewire 'Market Matters 12 July:

Not Held

James Gerrish on livewire today (i.e 12 July) :
  • We made a number of changes to portfolios today, generally increasing our exposure to resources into prevailing weakness – an international alert out shortly.
  • Goldmans went the other way and have downgraded their commodity price assumptions and outlook on the sector – Oz Minerals (OZL) cut to neutral but $20.50 price target v this mornings open of $15.93…We have gone the other way buying OZL today.
 

Sean K

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I'm hoping Glencore, Vale or Rio put their noses in. BHP are being very opportunistic here and OZL are correct to stonewall. Could be a $30 takeover. Not selling, even if the bid falls completely over. It means there's appetite in the market for consolidation and long term this is going to be much more valuable IMO.
 

Garpal Gumnut

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I'm hoping Glencore, Vale or Rio put their noses in. BHP are being very opportunistic here and OZL are correct to stonewall. Could be a $30 takeover. Not selling, even if the bid falls completely over. It means there's appetite in the market for consolidation and long term this is going to be much more valuable IMO.
In "normal" times outwith threats of war, deglobalisation and interruption of all supply chains I would agree @Sean K .

This an opportune moment for BHP to take out OZL and the instos however may be comfortable with accepting a slightly higher bid.

gg
 
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My intŕinsic valuation of OZL - $19 and that's with 2 dollars added on for putative near term growth.
Worked off FY18 eps as the median over 5 past years, ROE fy18 = 8% on book value fy21 of $11
Take the money before BHP (held) recognizes its madness and folds

Not Held
(runs away 🏃‍♂️)
 
Last edited:

Sean K

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My intŕinsic valuation of OZL - $19 and that's with 2 dollars added on for putative near term growth.
Worked off FY18 eps as the median over 5 past years, ROE fy18 = 8% on book value fy21 of $11
Take the money before BHP (held) recognizes its madness and folds (runs away 🏃‍♂️)

Not Held

Copper ran ahead of itself recently on the back of future expectations and not expecting a recession. OZL ran with it, so it might have been overvalued at the time. But, I think you're missing the dearth of Cu discoveries in the past 10 years and current mines running out of inventory. I think OZL is priced with an expectation of a supply demand crisis in the next 5 years, which just about every analyst is predicting. The biggest issue for bringing additional copper on line is the lengthy time from discovery to mining due to ESG and financing. I'm not sure if there's a single major project that might get to filling the future gap in the next 5 years.

A couple of scenarios below.

Screen Shot 2022-08-08 at 3.27.20 pm.png


Screen Shot 2022-08-08 at 3.30.56 pm.png
 
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