OZ Minerals Ltd. is seeking about A$10 billion ($6.7 billion) in a potential sale as BHP Group Ltd. pursues a deal for the Australian miner, people with knowledge of the matter said.
Sydney-listed OZ Minerals believes an offer of around A$30 per share would better reflect its growth prospects and be a starting point for further negotiations, the people said, asking not to be identified because the information is private. It rejected an earlier bid from BHP in August of A$25 per share.
BHP has been considering raising its bid for OZ Minerals and could increase its proposal as soon as this month, Bloomberg News has reported. It’s unclear how much BHP is willing to offer and whether it would meet OZ Minerals’ expectations. Shares in OZ Minerals closed at A$25.25 on Friday.
Deliberations are ongoing, and OZ Minerals could end up pushing for a different price, the people said.
OZ Minerals and BHP declined to comment.
BHP, which this year hived off its oil and gas assets, is seeking growth in commodities tied to trends including low-emissions transport and clean energy — particularly copper for renewables and nickel for lithium-ion batteries. BHP is also pouring billions of dollars into a giant new potash mine in Canada to enter the fertilizer sector.
The biggest miners are universally bullish on copper, expecting surging consumption in cities and electric vehicles as the global economy decarbonizes. Earlier this month, Rio Tinto Group reached a definitive agreement to acquire all remaining shares of miner Turquoise Hill Resources Ltd., owner of a giant copper mine in Mongolia.
OZ Minerals operates copper mines in South Australia, where BHP has its giant Olympic Dam operation and Oak Dam prospect.
BHP’s offer for OZ Minerals marked an attempted return to big-ticket dealmaking for the miner. Its last major transaction was a $12.1 billion deal for Petrohawk Energy Corp. in 2011, though it has since made smaller moves for copper and nickel assets.
(By Thomas Biesheuvel and Dinesh Nair)