CEO Mike Henry insists BHP will be disciplined with OZ Minerals bid

BHP boss Mike Henry has hinted the company is unlikely to sweeten its $25-a-share offer for OZ Minerals, insisting he will remain disciplined and describing the target’s assets as a “nice to have, not a must have”.

OZ last week flatly rejected the $8.4 billion bid from BHP and refused to engage with the mining giant, which Mr Henry has described as disappointing.

Speaking to reporters after the company unveiled record operating results, Mr Henry said he believed the company’s offer was “attractive and compelling” for OZ shareholders and represented “full and fair” value.

He noted the offer price represented a 32.1 per cent premium to the target’s closing price of $18.92 before the bid was made public.

BHP has previously identified copper as a favoured forward-facing commodity given its forecast demand growth profile associated with its role in the electrification of the world’s economy as it seeks to decarbonise.

The mining giant believes OZ’s Prominent Hill and Carapeteena mines in South Australia could offer synergies with its existing Olympic Dam mine and Oak Dam project.

Meanwhile, OZ’s West Musgrave nickel project in remote WA is expected to provide further growth for the company’s existing Nickel West business.

Mr Henry said it was disappointing OZ had not engaged with BHP over its bid but he was optimistic about the future for Olympic Dam even without the OZ assets.

“We will absolutely remain disciplined just because we know how important it is to ensure that we’re remaining disciplined from a capital allocation perspective,” he said.

“We spent a number of years now building trust with shareholders — that’s a very precious thing.”

He pointed to the company’s recent decision to withdraw from a bidding war with Andrew Forrest’s Wyloo Metals over Canadian nickel play Noront Resources, saying BHP had “a clear eye on value”.

Analysts from JP Morgan and UBS have previously said they were underwhelmed by BHP’s bid for OZ given the company was trading at less than half of the proposed $25-a-share bid price two years ago.