The board of directors of Australia-based WMC Resources (WMC) is recommending that shareholders accept an all-cash offer for the company’s issued share capital from BHP Billiton*.
WMC, owners of the Olympic Dam mine in South Australia, said in a statement on 8th March 2005 that the offer of 7.85 Australian dollars (AUD) per share should be accepted “in the absence of a superior proposal”.
In a separate statement issued on the same day, Switzerland based mining group Xstrata confirmed that it would not increase its unconditional offer of AUD 7 per share, which is due to close on 24th March 2005.
Xstrata’s unsolicited takeover bid was launched in November 2004 when the company initially offered AUD 6.35 cash per share for all WMC shares. The WMC board urged shareholders to reject that and the subsequent (revised) Xstrata bid, although the Australian Treasurer (finance minister) Peter Costello said on 11th February 2005 that the government had no objection to Xstrata’s proposed acquisition, subject to conditions.
The BHP Billiton cash offer is conditional on acceptances representing 90% of WMC shares and regulatory approvals and other conditions. BHP Billiton, which has its headquarters in Melbourne, Australia, said: “The acquisition of WMC Resources will establish BHP Billiton as a major producer of uranium with the largest resource base in the world. Uranium is an important energy source in an increasingly energy intensive world. Not only is this valuable on a stand-alone basis but it complements BHP Billiton's existing energy portfolio of oil, gas and coal.”
WMC chief executive Andrew Michelmore said: “We have consistently pursued all options to maximise value for WMC shareholders. We believe this AUD 7.85 offer represents excellent value for WMC shareholders. We will work with BHP Billiton to put the offer to WMC shareholders as soon as practicable.”
WMC directors indicated that they would be accepting this offer for their own holdings of WMC shares in the absence of a superior proposal. In order to secure this offer, WMC has entered into a “deed of undertaking” with BHP Billiton, the terms of which are summarised on WMC’s website (www.wmc.com).
