minmetals ups oz minerals offer by 15%

Minmetals has upped its offer to buy most of OZ Minerals' assets by 15 per cent after Macquarie Group Ltd pulls out of its recapitalisation proposal.

In a statement at 2254 AEST, Minmetals said it had increased its offer to OZ Minerals by $US1.86 million ($A2.29 million), making the deal, to be voted on by OZ Minerals shareholders on Friday, worth $US1.386 billion.

“Minmetals tonight presented a revised offer to the Board of OZ Minerals ... this offer will be valid for endorsement by shareholders at tomorrow’s OZ Minerals annual general meeting," the Chinese state-owned group said.

“Minmetals revised offer of $US1,386 million has been fully endorsed by the Board of OZ Minerals ... (the) offer provides an extremely positive conclusion for shareholders."

OZ Minerals' executive general manager of investor relations, Bruce Loveday, told Business Spectator the miner was delighted with the new offer from Minmetals and the improved value it provides for shareholders.

"We're absolutely delighted, and i think really Minmetals were there supporting us when we had some difficult times during the year," Mr Loveday said,.

"I really think that they have offered us a general solution and now following their preparedness to continue negotiating we've managed to get a 15 per cent improvement in value to shareholders.

"(We are) obliviously happy with the outcome for shareholders ... and I think Minmetals are going to have a great future in Australia"

Earlier on Wednesday, Business Spectator came to understand Macquarie had called OZ Minerals on Wednesday night to inform the miner it did not have enough time to propose an offer with underwritten equity and debt in place.

While OZ Minerals never confirmed that Macquarie had an offer on the table, it is widely understood Macquarie was behind a recapitalisation proposal.

Mr Loveday said Minmetals' revised offer had come after Macquarie had left the table.

"The (Minmetals') increase was finalised after Macquarie had gone away," Mr Loveday said.

Minmetals said its offer provided greater stability to OZ Minerals' assets and the miner's workers.

“Minmetals’ offer also provides greater stability to OZ Minerals’ assets and security of employment to OZ Minerals staff around Australia and in Laos,” Minmetals said.

Any counter-proposal to Minmetals offer to buy most of OZ Minerals' assets, excluding its Prominent Hill mine in South Australia, needs to be completely unconditional.

If the Minmetals deal is not completed on Thursday, OZ Minerals' bankers have the right to seek repayment of their $1.2 billion loan, meaning the miner risks going into administration.

It is believed, however, that more than half of OZ Minerals' shareholders have submitted proxy votes on the Minmetals offer, with media reporting over 90 per cent of those proxies are in favour of the deal.

Earlier on Wednesday OZ Minerals said it had not received any offer that would be superior to Minmetals' offer to buy most of the miner's assets.

"Notwithstanding media speculation to the contrary, OZ Minerals wishes to clarify that it has not received any new or revised capitalisation proposals subsequent to those received on Friday, 5 June 2009, which were both rejected by the company," OZ Minerals said.

OZ Minerals has recommended shareholders vote in favour of the Minmetals deal, after knocking back another proposal from a syndicate of investors lead by RFC Group and Royal Bank of Canada (RBC)

Despite having its proposal rejected, RFC said the syndicate had extended the deadline for OZ Minerals to accept the proposal to 1700 AEST on Thursday.

OZ Minerals said it has considered the alternatives on the table to the Minmetals deal, but none of the proposals were superior.

On Friday, OZ Minerals said of the two proposals it had received, proposal A (from RFC and RBC), an issue of convertible bonds was not in the interests of shareholders, and proposal B (believed to be from Macquarie) was not compelling with respect to value or execution.

"The board concluded that the structure of Proposal A was not in the interests of shareholders, that new investors in the proposed convertible bonds would be the principal beneficiaries of the proposal and that the certainty of the proposal being able to be completed was lacking," OZ Minerals said.

"Proposal B was assessed as not being sufficiently compelling either with respect to value or certainty of execution.

"Like Proposal A, it did not take into account a number of additional costs and fees that would be incurred if the recapitalisation was to go ahead, including the substantial fees (approximately $87 million) that the company would be required to pay to the proposer if it was to proceed with the proposal."


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