In today’s briefing:
- OZ Minerals (OZL AU): BHP Ups Offer by 13%; This Should Get Done
- OZ Minerals (OZL AU) And BHP Have a Deal – Investors Have an OTM Option on Copper
- Lotte Chemical – Ready to Announce Rights Offering Close to 2 Trillion Won?
- Anhui Conch Cement (914 HK): The Trough Looks to Be Behind Us
- China’s Top Rare Earth Mining Company and Top Refiner Fight Over Prices
OZ Minerals (OZL AU): BHP Ups Offer by 13%; This Should Get Done
- BHP Group has made a revised conditional, non-binding and indicative proposal to acquire all shares in OZ Minerals Ltd (OZL AU) at A$28.25/share, 13% higher than its earlier offer.
- The OZ Minerals Board has agreed to give BHP Group Ltd (BHP AU) exclusive due diligence access for 4 weeks and intends to unanimously recommend the revised proposal.
- Barring a competing proposal, this is BHP Group‘s best and final price – expect the stock to trade close to A$28/share today.
OZ Minerals (OZL AU) And BHP Have a Deal – Investors Have an OTM Option on Copper
- After nearly 3 months of no talks and movement, then a flurry of both, BHP Group Ltd (BHP AU) and OZ Minerals Ltd (OZL AU) have an agreed Revised Proposal.
- OZ Minerals Board has agreed to support the Revised Proposal at A$28.25/share, a 13% bump, subject to due diligence provided on an exclusive basis for four weeks.
- A fully-franked dividend or capital return will be allowed (Scheme price to be adjusted). This will probably trade tight. One owns a call option on copper for probably 3-4 months.
Lotte Chemical – Ready to Announce Rights Offering Close to 2 Trillion Won?
- Numerous local media mentioned today that Lotte Chemical (011170 KS) is getting ready to announce a major rights offering to acquire Iljin Materials.
- The size of the rights offering has not been finalized but the range of the rights offering could be about 1 trillion won to 2 trillion won.
- There are additional concerns about Lotte Chem funding additional capital into Lotte E&C, which could face more financial difficulties in the local construction sector.
Anhui Conch Cement (914 HK): The Trough Looks to Be Behind Us
- 3Q22 is probably the worst quarter for Anhui Conch Cement (914 HK) in this cycle. Demand has picked up sequentially, with 4Q22 average cement price up 7% QoQ.
- It expects the spending of special purpose bond proceeds and possibly push forward of 2023 quotas to benefit infrastructure demand. The stabilisation of property market also helps.
- Cost management efforts will soon pay off, providing room for recovery in margin. Solid financial position with net cash equals to 34.5% of share price is an added strength.
China’s Top Rare Earth Mining Company and Top Refiner Fight Over Prices
- Inner Mongolia Baotou Steel Union Co. Ltd., the world’s largest rare earth mining company, is still pressing for a significant price increase from its only customer even though the buyer’s shareholders rejected two previous proposals.
- Higher prices for Baotou Steel Union’s output of the key materials for green technologies could lead to a broader price increase for the minerals.
- China has the world’s largest deposits of the 17 closely related rare earth metals.
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