Grant Samuel & Associates recently estimated WMC’s value at A$7.17-A$8.24 per share.
BHP Billiton is the world’s largest diversified resources company and sees the acquisition as an opportunity to build on its nickel and copper businesses while adding uranium to its portfolio.
Among other properties, WMC owns and operates the Olympic Dam mine in Australia, which, in addition to being the fourth-largest copper mine (and a gold producer), exploits the largest-known uranium deposit.
BHP already owns a 57.5% interest in Escondida in Chile, the world’s largest copper mine.
In the second half of 2004, BHP earned US$5.2 billion before interest, tax, depreciation, impairments and amortization.
WMC’s 2004 net profit after tax was US$1 billion, and the company had US$3.98 billion in net assets at year-end.
BHP merged with Billiton in 2001. The company estimates annual cost efficiencies of US$91 million will be achieved with a one-time cost of US$95 million.
BHP’s bid is conditional on the receipt of regulatory approval and on the acquisition of at least 90% of WMC’s shares. The offer would be made by way of an off-market takeover bid under the Australian Corporations Act of 2001.
The WMC board of directors supports the BHP bid. A break fee of US$73 million will be payable to BHP if WMC decides to run with another bid.
The offer will be sent to shareholders in the coming weeks.
BHP’s offer upsets an earlier one from Swiss-based
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