The two companies announced this morning that the OZ Minerals board intends to unanimously recommend a new offer from BHP to purchase all its shares at a cash price of $28.25 per share.

The offer, made on Wednesday, is up 13 per cent from BHP’s first bid in August to acquire the South Australian copper miner at $25.00 per share, an offer OZ Minerals rejected and said undervalued the company.

BHP said its latest bid – which values OZ Minerals at $9.6 billion, up from $8.4 billion in August – represented the “best and final price” it was willing to offer.

It said the proposal was a 49.3 per cent premium on OZ Minerals’ closing share price of $18.92 on August 5 – the last trading day before BHP launched its first takeover bid.

OZ Minerals operates copper-gold mines at Prominent Hill and Carrapateena in the state’s Far North. It also has mines in Brazil.

BHP has viewed Prominent Hill and Carrapateena as attractive assets given they are located on either side of its operations at Olympic Dam, with BHP today touting the prospect of creating a “South Australian copper basin” after the takeover.

OZ Minerals shifted its head office from Melbourne to Adelaide with a $10 million grant from the state Government in 2015. The company made its own $18 million commitment to the partnership.

It’s South Australia’s second biggest company with yearly revenues exceeding $900m, according to the 2022 South Australian Business Index.

The company’s shares last closed at $26.30 after entering a trading halt on Wednesday.

OZ Minerals Chair Rebecca McGrath, who in August labelled BHP’s first takeover bid as “highly opportunistic”, said the OZ Minerals board was now of the view the new offer is in the best interest of shareholders.

“The Revised Proposal from BHP follows a period of Board-level engagement, securing a circa $1.1 billion increase to the Initial Proposal,” she told the ASX.

“It is the Board’s view that progressing the Revised Proposal, including providing BHP with access to due diligence, is in the best interest of OZ Minerals’ shareholders and other stakeholders.”

OZ Minerals has granted BHP a four-week exclusivity period to conduct due diligence on the deal, with both companies to work towards entry into a scheme implementation agreement in line with the new takeover proposal.

The due diligence period will begin on Monday.

BHP said it expects to retain “the vast majority” of OZ Minerals staff and give them access to “industry leading employee benefits including training programs, flexible work options and career progression opportunities”.

The company also touted the benefits of the takeover to BHP shareholders, including increased exposure to “future facing commodities”.

“The acquisition would add copper and nickel resources that are essential to support the global megatrends of decarbonisation and electrification,” BHP told the ASX.

BHP CEO Mike Henry said the new takeover was a “highly compelling offer” for OZ Minerals shareholders which would “[provide] certainty at a time of macroeconomic uncertainty and market volatility, and increasing risks for the industry”.

“The combination of BHP and OZL’s assets, skills and technical expertise provides a unique opportunity not available under separate ownership, with complementary resources including the Oak Dam exploration prospect and existing facilities within close proximity, backed by BHP’s strong balance sheet, capital discipline and commitment to sustainable development,” Henry told the ASX.

OZ Minerals CEO Andrew Cole said BHP’s new takeover bid was a “clear reflection of OZ Minerals’ unique set of highly strategic, quality assets in quality jurisdictions”.

“We look forward to working with BHP in a collaborative way to progress the Revised Proposal in the best interest of OZ Minerals’ and its stakeholders,” he told the ASX.