BHP bids A$9.2bil for WMC

  • Business
  • Wednesday, 09 Mar 2005

MELBOURNE: Global miner BHP Billiton Ltd/Plc announced yesterday an all-cash bid of A$9.2bil for uranium and copper firm WMC Resources Ltd, topping a hostile A$8.2bil offer by Switzerland-based Xstrata Plc. 

Analysts said the move by BHP Billiton could draw out a higher offer for WMC, which controls 38% of the world’s known uranium reserves at its Olympic Dam mine in southern Australia and is the world’s fifth largest nickel producer. 

“Potentially, we’ll be seeing more activity because WMC is a prized asset, which hasn’t been managed to its full potential over the last few years,” said Paul Xiradis, managing director of fund manager Ausbil Dexia, which has stakes in both WMC and BHP Billiton. “There’s a lot of value to be had by an acquirer.” 

Other potential bidders for WMC could include Rio Tinto Ltd/Plc, uranium producer Cameco Corp and Anglo American Plc. 

BHP Billiton, which is seeking to boost its nickel and copper assets and add uranium to its portfolio, said it had offered A$7.85 a share in cash for WMC, valuing the latter at US$7.3bil. It said WMC had recommended the bid in the absence of a higher offer. 

Xstrata, which last week put pressure on potential rivals to show their hand by dropping all conditions on its bid, said it would not raise its offer for WMC. 

“Xstrata confirms it will not be increasing its unconditional offer of A$7 per share due to close on March 24,” the copper and coal miner said in a statement. 

BHP Billiton chief executive Chip Goodyear said the company's acquisition of WMC would create the world’s second largest copper producer – after Chile’s state-owned Codelco – and third largest nickel producer – after Russia’s NorilskNickel and Canada’s Inco Ltd. 

“The opportunity to acquire tier-one assets in low-risk regions and ideally, geographically suited to the growing Asian market, does not come around very often,” he told reporters. 

“It gives us significant long-term development options; it enables us to benefit from the continued strength in the global commodity markets and it further positions us to take the opportunity to benefit from an extended commodity cycle,” he added. 

BHP Billiton said it would finance its bid from new and existing debt facilities, adding that the acquisition would boost earnings in fiscal 2006. – Reuters  

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Next In Business News

Fed's Powell: 'no one' happy with fellow policymakers' trading
Fed signals bond-buying taper coming 'soon,' rate hike next year
Malaysia deals fresh blow to global copper scrap trade
Exxon, Chevron conceal payments to some governments
Oil prices up on US stocks draw, rising fuel demand
GLOBAL MARKETS-Stocks post gains, dollar strengthens after Fed flags taper soon
Vizione gets RM500mil GDV project
ECB to weigh QE boost when Covid bond buys end, Muller says
CMP3 launch seen as timely
Vehicle sales set to rise

Stories You'll Enjoy