LONDON BRIEFING: BHP's GBP5 billion approach for Oz Minerals rejected

(Alliance News) - Miner BHP on Monday said that it offered to buy Oz Minerals late last week but that the Oz board rejected its approach.

BHP said it offered AUD25.00 per share for Sydney-listed Oz, 32% above its close on Friday of AUD18.92. On Monday, the stock ended up 35% at AUD25.59, giving Oz Minerals a market capitalisation of AUD8.57 billion, about GBP4.93 billion.

The offer requires unanimous recommendation by the Oz board, but BHP said the board has refused to engage.

"Our proposal represents compelling value and certainty for Oz Minerals shareholders in the face of a deteriorating external environment and increased OZL operational and growth-related funding challenges," said BHP Chief Executive Officer Mike Henry.

"We are disappointed that the board of OZL has indicated that it is not willing to entertain our compelling offer or provide us with access to due diligence in relation to our proposal."

BHP shares closed up 0.8% at AUD39.12 in Sydney on Monday and were down 0.2% at 2,241.00 pence early in London.

Here is what you need to know at the London market open:

----------

MARKETS

----------

FTSE 100: up 0.6% at 7,480.83

----------

Hang Seng: down 0.6% at 20,072.17

Nikkei 225: closed up 0.3% at 28,249.24

S&P/ASX 200: closed up 0.1% at 7,020.60

----------

DJIA: closed up 76.65 points, or 0.2%, at 32,803.47

S&P 500: closed down 6.75 points, or 0.2%, at 4,145.19

Nasdaq Composite: closed down 63.02 points, or 0.5%, at 12,657.56

----------

EUR: firm at USD1.0175 (USD1.0165)

GBP: up at USD1.2077 (USD1.2060)

USD: flat at JPY135.40 (JPY135.20)

GOLD: down at USD1,774.45 per ounce (USD1,776.71)

OIL (Brent): down at USD95.80 a barrel (USD96.23)

(changes since previous London equities close)

----------

ECONOMICS AND GENERAL

----------

Monday's key economic events still to come

UK Michael Saunders departs as BoE MPC external member

----------

Despite its initial announcement that Chinese manoeuvres around Taiwan would end on Sunday, the People's Liberation Army continued its large-scale sea and air drills on Monday. China's state television reported that the exercises were focussing on "anti-submarine and sea assault operations". In announcing the manoeuvres to the north, south-west and east of self-ruled island last Tuesday, China had originally promised their conclusion on Sunday. No new formal end date has been announced. Some commentators on Chinese media expressed the view that the military exercises could become the new normal. Defence Ministry spokesman Wu Qian on Monday said the drills are a "necessary warning" to the US and Taiwan, describing them as an "entirely reasonable and appropriate" response to their recent "provocations". He said the tensions were "deliberately" stoked by Washington, with US House of Representatives Speaker Nancy Pelosi travelling to Taipei last week in the face of fierce opposition from Beijing.

----------

The average annual price paid for motor insurance in the UK increased by GBP5 in the second quarter of this year, according to an industry body. The Association of British Insurers said the typical price for private motor insurance has increased to GBP419 – and insurers are finding it increasingly challenging to absorb rising cost pressures. The latest figure is still GBP11 lower than in the same quarter in 2021. The average premium paid for a new policy in the second quarter was GBP129 higher than for a renewed policy. Average premiums for new policies stood at GBP500 and average premiums for renewed policies increased were put at GBP371.

----------

BROKER RATING CHANGES

----------

JPMorgan cuts M&G to 'underweight' (neutral) - price target 210 (250) pence

----------

JPMorgan raises Legal & General to 'overweight' (neutral) - price target 365 (325) pence

----------

JPMorgan cuts Phoenix Group to 'neutral' (overweight) - price target 775 (800) pence

----------

COMPANIES - FTSE 250

----------

Clarkson raised its interim dividend, as the shipping services provider said it delivered a positive performance across all divisions. For the six months to June 30, pretax profit was GBP42 million, up 53% from GBP27.3 million last year, on revenue of GBP266.7 million, up 40% from GBP190.1 million. Clarkson raised its interim dividend by 7.4% to 29 pence from 27p paid a year before. "The outlook for the business remains strong due to the structural supply shortage in the global shipping fleet and we continue to benefit from our international footprint, leading market position, diverse offering and a deep understanding of the energy transition," Chief Executive Officer Andi Case said.

----------

PageGroup said it achieved a strong first-half performance across of its geographies, disciplines and brands, prompting the recruiter to raise its dividend. For the six months to June 30, pretax profit rose 80% to GBP114.5 million from GBP63.7 million last year on revenue of GBP977.3 million, up 28% from GBP766.4 million. PageGroup declared an interim dividend of 4.91p, up 4.5% from 4.70p paid last year. In addition, the headhunter announced a special dividend of 26.71p, unchanged from last year. "Looking forward, we recognise the heightened degree of global macro-economic and geo-political uncertainty, particularly with regards to increasing inflation around the world. In July, we noted a slight slowing in time to hire in some of our markets, and we continue to closely monitor our forward-looking key performance indicators. However, at this point, our expectations for 2022 full year operating profit remain in line with the company compiled consensus of GBP206 million," said Chief Executive Officer Steve Ingram.

----------

COMPANIES - SMALL CAP

----------

Joules Group confirmed a weekend press report that it is in discussions with FTSE 100-listed retailer Next about a potential equity investment, raising proceeds for Joules of GBP15 million. Joules said the stake would be taken "at no less than Joules' current market price", which would result in Next becoming a strategic minority shareholder. The equity investment would be subject to approval by Joules' shareholders, it added. On Sunday, Bloomberg reported Next was in talks to acquire a minority stake in the British lifestyle brand for about GBP15 million. Joules shares were up 25% early Monday at 41.20 pence, though they remain down 85% in the past 12 months. Next was up 0.5%.

----------

COMPANIES - GLOBAL

----------

SoftBank Group swung to a sizeable first-quarter loss, with valuations in its tech-heavy Vision Funds battered by rising interest rates and economic downturn fears. For the three months to June 30, the Tokyo-based telecommunications provider and technology investor posted net sales of JPY1.572 trillion, about USD11.62 billion, up 6.3% annually from JPY1.479 trillion. It swung wildly to a JPY3.292 trillion pretax loss, however, from a JPY1.292 trillion profit a year earlier. SoftBank posted a loss on its investments totalling JPY2.834 trillion, an eye-popping swing from a JPY1.263 trillion gain a year earlier. Highlighting just how badly sentiment towards the tech sector has weakened amid a series of rate hikes from central banks across the globe, SoftBank posted a JPY2.919 trillion loss on investments from its Vision Funds alone. It had reported a gain of JPY507.30 billion a year earlier. SoftBank's Vision Funds include its investments in buy now pay later firm Klarna, online licensed sportswear retailer Fanatics and automation firm AutoStore.

----------

Monday's shareholder meetings

Altus Strategies PLC - GM re merger with Elemental Royalties Corp

Bushveld Minerals Ltd - AGM

Essentra PLC - GM re unit sale

Oscillate PLC - AGM

----------

By Tom Waite; thomaslwaite@alliancenews.com

Copyright 2022 Alliance News Limited. All Rights Reserved.