OZ Minerals scraps RBC-RFC bid, favours Minmetal

09 June 2009

Debt-saddled Australian miner OZ Minerals has rejected the last-minute joint attempt by Canada's RBC Capital Markets and Australia's RFC Corporate Finance to recapitalise the company, on the grounds that the proposal was less certain than the Minmetals transaction and the new bidders have not offered a complete solution to the company's refinancing issues.

Another proposal, apparently from Macquarie Bank, too was discarded on similar grounds, as OZ says it was not sufficiently compelling either with respect to value or certainty of execution. Both the proposals were received by OZ Minerals on late Friday. (See: Royal Bank of Canada-RFC combine threatens Minmetal's bid for OZ Minerals) 

The Melbourne-based miner has successfully struck a $1,206-million deal with China's Minmetals and obtained all the necessary approvals from the Australian and Chinese authorities for the sale of a major portion of its assets to Minmetals, apart from the decisive vote of OZ Minerals shareholders at the forthcoming Annual General Meeting (AGM).

The company had announced that the AGM will be held in Melbourne on 11 June at 10:30 am.

OZ Minerals chairman Barry Cusak said in a press release yesterday: ''We believe, that in the Minmetals transaction, we have a proposal to resolve OZ Minerals' refinancing issues that is both highly certain and offers value to our shareholders''.

Both the proposals contained arduous terms of equity acquisition, which are believed to be more beneficial to the new investors rather than the OZ shareholders, the company said.