BHP and OZ Minerals were in discussions about offtake agreements for West Musgrave, before the Big Australian changed course and stunned everyone with an $8.4 billion bid for the entire company.
BHP and OZ Minerals were in discussions about offtake agreements for the latter’s West Musgrave project in Western Australia, before the Big Australian changed course and stunned its target with an $8.4 billion bid for the entire company.Investor sources briefed by OZ Minerals in the past few days said the two companies had been talking at an operational level about West Musgrave for a potential offtake agreement, with no mention of a whole of company transaction.
But at what price OZ would be willing to grant BHP due diligence, is pretty much anyone’s guess at this point. Citi and Barrenjoey are in BHP’s corner.The approach and the retreat were so swift that investors haven’t had time to think what the company’s worth to a bidder. But they are taking heart from three things: that OZ smacked the $25 a share bid really hard and that the two had been talking about offtakes .
Investors reckon they still need a week or so to come up with a number they reckon would be fair, and OZ’s half-year results are due about the same time. But early talk is any suitor wanting to unlock OZ’s data room would have to present it with a low-thirties bid.