The OZ Minerals Limited (ASX: OZL) share price has shot higher to be the best performer in the S&P/ASX 200 Index (ASX: XJO) at the time of writing.
OZ Minerals shares are currently trading for $25.51 each, a 34.83% leap from their previous close of $18.92 a share.
It comes as BHP Group Ltd (ASX: BHP) has offered a takeover bid of $25 cash per OZ Minerals share.
BHP's bid represents a premium of 32.1% compared to the last closing price of OZ Minerals shares last week.
According to OZ Minerals, BHP has accumulated an interest in OZ Minerals through derivative instruments, amounting to a holding of less than 5%.
After considering the offer, the OZ Minerals board decided the offer "significantly undervalues" the company and rejected it.
OZ Minerals pointed out the offer represents a premium of just 13.1% to the volume weighted average price for the last six months.
Management response
OZ Minerals managing director and CEO Andrew Cole said:
We have a unique set of copper and nickel assets, all with strong long-term growth potential in quality locations. We are mining minerals that are in strong demand particularly for the electrification and decarbonisation thematic and we have a long-life resource and reserve base. We do not consider the proposal from BHP sufficiently recognises these attributes.
OZ Minerals pointed out here is a "strong long-term outlook" for both the copper and nickel markets underpinned by increasing geological scarcity, global electrification, and accelerating decarbonisation. It says it's highly leveraged to this and is exploring for more deposits.
OZ Minerals share price snapshot
Since the start of 2022, OZ Minerals shares are still down 9% despite the huge rise today.
The company has a current market capitalisation of approximately $8.5 billion.
