UPDATE: OZ Minerals CEO: Minmetals Remains Superior Proposal
May 26 2009 - 11:50PM
Dow Jones News
OZ Minerals Ltd. (OZL.AU) Chief Executive Andrew Michelmore
Wednesday said the company has received alternative proposals to a
A$1.2 billion bid by China Minmetals Nonferrous Metals Co., but
that the offer by the commodity trader remains superior.
"We've had various proposals come forward, but unlike the
Minmetals deal, they don't provide a total solution for our
financial position," Michelmore told Dow Jones Newswires on the
sidelines of the Minerals Week conference in Canberra.
"The Minmetals bid is in the best interests of our shareholders.
If we do receive a superior bid, it's the board's duty to consider
it, but we haven't received one," he said.
Shareholders are due to vote on the deal on June 11.
Minmetals is set to pay US$1.21 billion for most of OZ's mining
assets apart from its Prominent Hill mine in South Australia
state.
OZ plans to use the funds to pay down some of the A$1.1 billion
in debt due for refinancing June 30 and says it will still have a
cash balance of about A$600 million once the transaction is
completed.
If the transaction goes ahead, Michelmore will become CEO of
Minmetals' Australian operations.
"Minmetals looks to grow the business organically. We will also
look at other ways to grow the business, but they have to add
value. For now, what we're focused on is to get the deal done," he
told reporters.
Michelmore denied that BHP Billiton Ltd. (BHP) - long rumored as
a potential buyer for the Prominent Hill mine - has visited the
operation.
"Our data room has been closed since the Minmetals bid was
announced," he said.
Asked what kind of a recovery for commodities demand he
expected, Michelmore said much of the current rally in base metals,
particularly copper, was down to restocking among key consumers
such as China.
"There are positive signs that demand is picking up, such as
improved car sales that indicate the economy in China and elsewhere
is picking up. But we are cautious about the demand recovery and
when the restocking cycle is going to end. Demand is picking up but
slowly," he said.
-By Elisabeth Behrmann, Dow Jones Newswires; 61-2-8272-468992;
elisabeth.behrmann@dowjones.com