A banker who knows both companies well report in a British newspaper on Monday said that Glencore Xstrata Plc is unlikely to seize upon on OZ Minerals Ltd; Glencore offers a 750 million pound ($1.2 billion) for takeover offer. OZ Minerals had appointed UBS as a defense adviser. Glencore had acquired up to a 10 percent stake in OZ Minerals according to The Mail on Sunday.
According to Australian rules, any investor holding at least 5 percent of a stock must disclose their ownership. But on the other hand OZ Minerals disclose on Monday that it had not yet received any proposal or any substantial shareholder notice from Glencore. Swiss-based Glencore would have any interest in OZ Minerals as Glencore is looking to conserve cash.
OZ Minerals Ltd (FRA:OXR) owns the famous Hill copper mine in South Australia, whose costs are rising as its mine life increases. As copper is exported to China, so it not provides any supply for Glencore’s Mt Isa operation. And if OZ a bargain its assets this would not benefit Glencore. The banker said that although he was not authorized to speak on behalf of Glencore Xstrata Plc but this will not provide an obvious synergy. Other assets of OZ Minerals’ include the new Carrapateena deposit in South Australia, which would not benefit Glencore it already selling off some emergent copper assets and it has no interest in spending on new mines.
OZ Minerals is confused in whether to develop Carrapateena while is sitting on A$433 million in cash, looking for producing mines that could raises its output as Prominent Hill. On equity research sales at Foster Stockbroking Mark Hinsley said that there is a pressure on them to buy another operating project.
After the British report on Monday Shares of OZ Minerals Ltd (FRA:OXR) rose more than 6 percent that is near five-month high of A $4.71 that would in result value the company at A$1.38 billion. On that entire scenario Glencore and UBS refused to comment to Reuters on the Mail on Sunday report.
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