OZ Minerals Says Regulator May Rule on Minmetals Bid

By Jesse Riseborough

March 19 (Bloomberg) -- OZ Minerals Ltd., the debt-laden company that agreed to a A$2.6 billion ($1.8 billion) takeover by China Minmetals Group, said an Australian regulator may rule on the offer by the end of the month.

“We’re hopeful of some indication from the government by the end of the month,” Matthew Foran, spokesman for Melbourne- based OZ Minerals, said today by phone. The company this week said it was seeking an extension from its lenders on A$1.2 billion in debt before a March 31 deadline.

State-owned Minmetals, China’s biggest trader of metals, submitted its bid for OZ Minerals to the Foreign Investment Review Board on Feb. 19 and a decision is due by March 21 under the 30-day assessment period, RBC Capital Markets said today in a note to clients. OZ Minerals fell for a fourth day, declining 1.8 percent to 53.5 cents. Minmetals has offered 82.5 cents.

Australian lawmakers yesterday voted to begin an inquiry into investment by state-owned companies and sovereign funds after Aluminum Corp. of China’s planned $19.5 billion funding deal with Rio Tinto Group and Minmetals bid for OZ Minerals, the world’s second-biggest zinc producer. The board this week extended its review of Rio’s deal by as long as 90 days.

“An investment decision is difficult based on decisions out of Canberra, but on balance we believe Minmetals will acquire OZ Minerals in due course,” RBC said.

Decisions Pending

China’s Hunan Valin Iron and Steel Group is also awaiting a decision from the review board after it agreed to invest A$1.3 billion in Fortescue Metals Group Ltd.

“We haven’t received any notice from the Australian government regarding the deal,” Valin’s general manager Li Jianguo said today by phone. “We are waiting for it.”

Cameron Morse, a Perth-based spokesman for Fortescue, said the company hasn’t received formal advice on the assessment timetable.

The Australian inquiry was announced the same day as China stopped the biggest takeover of a Chinese company by an overseas rival when it rejected Coca-Cola Co.’s $2.3 billion bid for China Huiyuan Juice Group Ltd.

Australia’s Senate Economics Committee will report by June 17, opposition Nationals, Senator Barnaby Joyce, who proposed the inquiry said yesterday.

The senate committee can call executives from companies, including Rio and Chinalco, to give evidence and will make recommendations. The government doesn’t have to accept the findings and Treasurer Wayne Swan, 54, will make the final decision on the deal following advice from the board.

To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net