Anglo-Australian miner BHP Billiton Ltd. has offered $7.3 billion in cash for Australian metals miner WMC Resources Ltd. on Tuesday, topping a spurned $6.5 billion bid from Swiss-based Xstrata PLC.
The WMC board said in a joint statement with BHP that it had unanimously recommended the offer in the absence of a higher bid.
If successful, the takeover bid will give BHP Billiton control of two of the world’s four largest copper deposits and establish the company — already the world’s largest miner — as a major producer of uranium.
But BHP’s offer could entice offers from rivals such as Rio Tinto PLC, which had been expected to make a counteroffer after the federal government last month gave permission under its foreign ownership regulations for Xstrata to buy WMC.
WMC is a metals miner that holds significant copper and nickel deposits, and almost 40 percent of the world’s known uranium resources at its Olympic Dam mine in South Australia state.
BHP’s offer is worth $6.22 a share, and is 85 cents a share higher than Xstrata’s cash bid of $5.55 per share, which the WMC board previously rejected saying it was too low.
The proposed deal for WMC Resources “is a further step in BHP Billiton’s strategy of developing, operating and maximizing the performance of large scale, long-life, low cost assets,” BHP Billiton Chief Executive Chip Goodyear said in the statement.
He said the proposed takeover would provide BHP Billiton with “premium long-term options to satisfy continuing demand growth in China and other high-growth economies” for base metals.