https://newswire.iguana2.com/af5f4d73c1a54a33/ozl.asx/2A1389424/OZL_OZ_Minerals_Rejects_Indicative_Proposal_from_BHP

$OZL rejects non-binding indicative takeover proposal from BHP at $25/share.

An easy response from the Board, as it is only a 13.1% premium to VWAP for the 6 months prior.

Note that broker concensus for $OZL is $20.35 (Range $14.50 - $27.12; n=19). M preliminary view on the broker consensus is that it is unduly influenced by the short term supply-demand balance plus the prospects for a global recession, and fails to account for the longer term opportunity in this commodity. $OZL represents the bext copper pure play on the ASX. Of all the critical minerals for the green transition, copper is expected to have tight supply through most of the run to 2030 and 2050. So the strategic rationale from $BHP is clear. Known resources are limited, resource grades are declining and time to develop new mines is long. The green transition locks in a lot of Cu demand over the next 20+ years.

I am slightly annoyed that BHP has made the move, as I am only part way through a review of the medium/long term copper market with a focus on looking to add $OZL to my portfolio on further Cu price weakness linked to macro-conditions. Will have to wait and see now.

Disc: Not held. (on watch list)

Strong performance sets foundation for next growth phase

• 30% increase in Net Profit After Tax to $213 million on net revenue of $1,342 million
•  Underlying EBITDA of $606 million with a strong 45% operating margin
•  Earnings Per Share of 65 cents, an increase of 29% on the prior year
•  Operating cash flows of $550 million; net cash balance at $32 million
•  Fully franked final dividend of 17 cps (25 cps total dividend for 2020)
• New suite of metrics demonstrate how value is created for all stakeholders

21-Feb-2020:  Here is a summary of four brokers who cover OZL, with their latest calls:

• Ord Minnett:  Accumulate, TP (target price): $11.30
• Macquarie:  Outperform, TP: $11.30
• Morgans:  Hold, TP: $10.85
• Citi:  Neutral, TP: $11.00

Average TP = $11.11, so that's my new valuation for OZL, since I don't really personally follow them very closely (Sandfire - SFR - is my preferred copper exposure).  I am going to add them to my Strawman.com scorecard because I think their recent SP decline is as a direct result of the Covid-19 coronavirus fears (and associated global growth concerns which results in lower copper prices) and I think that presents an opportunity to pick up good Australian copper producers at lower prices until this all gets resolved and we move on.  OZL is currently trading at around the $10/share mark.