Syndicate to trump Chinese offerMathew Murphy
June 5, 2009
http://business.smh.com.au/business/syndicate-to-trump-chinese-offer-20090604-bx8a.html
THE OZ Minerals board will receive a $US1.2 billion ($1.5 billion) recapitalisation offer today led by the Royal Bank of Canada and RFC Group, with the institutional investors pledging to go even higher if the offer is deemed inferior to the recommended Minmetals transaction.
About 20 local and international investors spent yesterday concluding the 11th-hour proposal that came less than a week after a shareholder vote on the $US1.2 billion Minmetals bid. That deal includes all of the company's assets except the Prominent Hill copper and gold project in South Australia and the Martabe gold and silver project in Indonesia.
Sources close to the RBC-RFC Group deal said it involved $US1 billion in equity and convertible bonds, with the bonds set to comprise about three-quarters of that figure. A $US200 million working capital facility is also proposed.
While OZ Minerals has known of the plan for about two weeks, the company is believed to be furious at what some are calling an "unparalleled hostile equity raising".
OZ Minerals would not comment yesterday other than issue a two-line statement saying it had "not received a recapitalisation proposal which it considers to be a superior alternative to the China Minmetals transaction".
The group of institutions met the OZ Minerals chairman, Barry Cusack, on Wednesday morning during which the Herald believes they were told the deal was "there on value but not on certainty".
By Wednesday afternoon OZ Minerals released a statement saying the Minmetals offer provided a "complete solution to our refinancing issues".
"The board continues to unanimously recommend the offer from Minmetals," OZ Minerals said. A source told the Herald that when the proposal arrives at OZ Minerals' Melbourne offices today it will be accompanied by a letter indicating binding acceptances from people willing to participate in the recapitalisation, and a majority of institutional shareholders.
That is unlikely to be enough to achieve more than 50 per cent and vote down the Minmetals proposal at Thursday's meeting. However, if the OZ Minerals board believes the deal is superior then the vote could be scrapped.
Sources also said the rival proposal was also "oversubscribed" and that those participants would consider increasing the offer if it was rejected by the board.
OZ Minerals's shares fell 3c yesterday to 87c.
My comments
The best part is the board is furious! Hooray, finally the shareholders strikeback!!!!!
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