OZ Minerals Ltd. said March 27 that it intends to make an off-market takeover offer to acquire Brazil-focused copper-gold miner Avanco Resources Ltd., valuing the target at A$418 million, or 17 cents per share.
Subject to a 50.1% acceptance, Avanco shareholders will receive 8.5 cents in cash and 0.009 OZ Minerals shares per Avanco share, with the cash component to be funded using available cash on balance. OZ Minerals said that the offer is final and will not be increased.
Avanco's board has unanimously recommended the takeover offer, with shareholders representing about 30.62% of Avanco's issued share capital indicating that they will accept the takeover offer in the absence of a superior proposal.
OZ Minerals said that the deal represents a value and earnings accretive opportunity for its shareholders through multiple growth options, while it said that Avanco shareholders will receive fair value for its illiquid stock, while retaining exposure to Brazil.
"On completion of the transaction, we will undertake a business execution review to hone our pathway to optimizing the portfolio, improving operating costs to position the business in the bottom half of the cost curve, and accelerate growth," said OZ Minerals CEO Andrew Cole.
OZ Minerals is advancing its Carrapateena copper project in South Australia and West Musgrave nickel-copper project in Western Australia, while Avanco holds an option to acquire Vale SA's Pantera copper project in Brazil.