Published 11:52 AM, 6 Jun 2009 Last update 12:48 PM, 7 Jun 2009
CBA chief won't pull plug on any reasonable proposal OZ Minerals receives 12:48 PM
Commonwealth Bank of Australia Ltd chief executive Ralph Norris says he is not going to pull the plug on any reasonable proposal OZ Minerals receives that might deliver be a better outcome for shareholders than the $US1.2 billion ($A1.5 billion) deal on offer from China's Minmetals.
Mr Norris told Business Spectator exclusively at the company's annual general meeting on Thursday that OZ Minerals would not lose the support of the bank if it does not recommend the Minmetals offer.
Mr Norris said he understood the mining and economic environment had changed dramatically from a few months ago when the price to buy most of OZ Mineral's assets, excluding its Martabe gold mine in Indonesia and its Prominent Hill mine in South Australia, was set.
OZ Minerals told the market on Friday it had been sent $US1.2 billion recapitalisation proposal by a syndicate of about 20 investors led by the Royal Bank of Canada (RBC) and RFC Group.
The proposal stated OZ Minerals could raise equity and convertible bonds under a working capital facility, allowing the miner to repay the debt it owes.
RBC Capital Markets managing director Richard Barker and RFC managing director Rob Adamson said the syndicate's recapitalisation proposal was superior to the Minmetals offer and many of OZ Minerals' major shareholders were supportive of it.
"Our proposal is clearly superior on value and provides certainty to OZ Minerals," the joint statement by Mr Barker and Mr Adamson said.
"Several of OZ Minerals largest shareholders are strongly supportive of the recapitalisation proposal."
Up to OZ Mins board
Haydn Lynch of RBC told Business Spectator that the OZ Minerals board has said it will consider the new bid, "as they bloody well should."
"We've been following the OZ situation for awhile, the asset sales," Mr Lynch said.
"So we're late in the game, but we've been working for several weeks to get our proposal up.
"It's there, it's in the tent, it's up to the OZ Minerals board."
He said the offer lodged on Friday was fully funded and committed, and could be completed by June 30.
Mr Lynch said it would be a "real shame" if OZ went through with its Minmetals deal because Australia did not have enough mid-tier mining companies.
He likened OZ Minerals' Minmetals deal to the one made by Rio Tinto in February with Chinese aluminium group Chinalco.
"Both were made near the bottom of the market. Some things have changed," Mr Lynch said.
In a market release after Friday close, OZ Minerals said it did not wish to pursue any proposals that had been set before them.
"OZ Minerals informed the parties at the time that it did not wish to pursue the indicative proposals," the miner said.
"OZ Minerals will ... review any future unsolicited proposals that may be put to it and, if it likely that any such proposal could be in the interests of shareholders, it will be given due and proper consideration.
"However, the company does not expect that any future unsolicited proposal that is similar to the previous proposals would be superior to the Minmetals transaction."
OZ Minerals will hold its annual general meeting on Thursday June 11.
Shares in OZ Minerals rose 1.72 per cent to 88.5 cents on Friday.
OZL Price at posting:
$8.85 Sentiment: Hold Disclosure: Held
