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OZL

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$26.44 oz minerals limited

VOTE NO!!! Stop the steal, page-73

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wolfofasx

667 Posts.

87

22/01/23

18:36

Post #: 65819839
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Originally posted by TazD ↑

Hi All,

This Scheme of Arrangement is intriguing. I have done some analysis. OZL is the largest copper play on the ASX followed by SFR. I am a shareholder in both.

OZL is the lower risk copper play for Australian investors with more developed assets, lower debt levels and more assets in Australia, but otherwise both companies are predominantly exposed to the copper market. There are some differences in exposure to base and precious metals but not significantly as i understand it. In my analysis I am suggesting that SFR is a crude proxy for how the OZL share price would move if the offers from BHP did not exist.

Since the first indicative offer by BHP made on the 8/8/2022 the copper price is up 20.3%* and SFR is up 38.8%. Given that mining companies are typically leveraged to the underying commodity price this is reasonable.

Since the board entered the Scheme with BHP on the 18/11/2022 the copper price is up 16.2%* and SFR is up 33.5%.

* Copper price in USD.

With the rise of the copper price this is effectively wiping out the takeover premium of BHP. That premium was claimed to be 49.3% based on the closing price pre the indicative offer on the 5/8/2022.

Based on this, if the vote were to be now, I would vote No.

I have created a couple of graphs indexing prices of OZL, SFR and Copper at each offer from BHP for illustration.

Note that I have not taken into account a dividend ex-div date 31/8/2022 of 8c FF (<0.3% of OZL SP)

Expand

Let’s hope some of the institutional investors backtrack on being happy with the offer as they’re going to be the ones who ultimately decide if this gets taken over or not. My opinion is OZL is better off going alone and developing their assets the way they have been for the past few years and delivering good returns to shareholders

OZL Price at posting: $27.92 Sentiment: Buy Disclosure: Held
5 Upvote

0 Great analysis

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