It is likely that BHP Group will continue to pursue plans to acquire Australia’s OZ Minerals and will raise its A$8.34 billion ($5.82 billion) bid, analysts said after BHP’s fist offer for the nickel-copper miner was rebuffed.

Reuters reported that OZ rejected BHP’s A$25 per share offer, terming it undervalued and “opportunistic” as it was tabled when copper prices and its stock price have fallen from recent peaks.

BHP plans to zero in on battery metals like nickel and copper to align itself with a global push towards electrification and decarbonization, as firms race to capitalize on burgeoning interest in clean energy and electric vehicles.

While the companies did not say if another bid was in the offing, analysts expect a higher offer and touted the likelihood of a bigger takeover battle.
Brad Smoling, managing director at Smoling Stockbroking, said other players would eye OZ's assets in light of the green energy push, and suggested a new offer could be up to A$30 per share.

“Other buyers may be interested in OZ Minerals with many miners optimistic on the outlook for copper. Potential acquirers such as Glencore, Anglo American , Teck Resources, and so on are in very strong financial shape and able to bid,” said Jon Mills, an equity analyst at Morningstar.

Mills added, however, that BHP was likely overpaying for the deal at the current price, though that would not deter it from making another approach.

Photo credit: OZ Minerals' Prominent Hill.