OZ Minerals Shares Trade Below Bid Price on Approval...

OZ Minerals Shares Trade Below Bid Price on Approval Concern:

(Bloomberg) -- OZ Minerals Ltd., the world’s second-largest zinc mining company, traded 16 percent below the bid price of China Minmetals Corp.’s A$2.6 billion ($1.7 billion) takeover on concern Australia may block the deal.

OZ Minerals, which hasn’t traded since Nov. 27, advanced 26 percent to 69.5 cents a share at 11:22 a.m. Sydney time on the Australian stock exchange, 13 cents lower than the 82.5 cents a share offer from state-owned Minmetals that was accepted yesterday the Melbourne-based company’s board.

“There is always the possibility that the government could block the bid,” said Jamie Spiteri, head dealer at Shaw Stockbroking Ltd. in Sydney, adding the lower trading price also signaled a rival bid was unlikely. “You’ve still got three months until you get your cash from the bid so therefore the stock is trading at a discount.”

The bid needs approval from Australia’s foreign investment regulator and Treasurer Wayne Swan, who last week tightened takeover laws when Aluminum Corp. of China agreed to invest $19.5 billion in Rio Tinto Group. The rout in commodity prices is prompting China to lock in global resources by targeting debt-laden mining companies in need of funds.

“The key condition in our view is Foreign Investment Review Board approval,” RBC Capital Markets analyst Geoff Breen said in a report dated yesterday. The stock will trade at a discount on “timing and completion risk,” he said.

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