8th Mar 2005 07:21
BHP Billiton PLC08 March 2005 Date: 8 March 2005Number: 10/05 BHP BILLITON ANNOUNCES US$7.3 BILLION CASH OFFER FOR WMC RESOURCES BHP Billiton today announced a cash offer of A$7.85 per share for the entireissued capital of WMC Resources Limited ("WMC Resources"), valuing WMC Resourcesequity at A$9.2 billion (US$7.3 billion). The Board of WMC Resources has unanimously recommended that WMC Resourcesshareholders accept the BHP Billiton offer in the absence of a superior proposaland has indicated that the directors will be accepting this offer for their ownholdings of WMC Resources shares on that basis. The offer is A$0.85 per share higher than Xstrata's cash bid of A$7.00 per shareand in the top half of the valuation range provided by Grant Samuel, WMCResources' independent expert, in its Target Statement. BHP Billiton Chief Executive Officer, Chip Goodyear said: "The acquisition ofWMC Resources is a further step in BHP Billiton's strategy of developing,operating and maximising the performance of large scale, long-life, low-costassets. It is an excellent opportunity to build on our existing nickel andcopper businesses and bring uranium into our suite of energy products.Furthermore, the acquisition provides additional premium long-term options tosatisfy continuing demand growth in China and other high-growth economies. "BHP Billiton is best placed to maximise the value of WMC Resources' assets.No other potential purchaser brings to this transaction the experience andsynergy benefits of already operating in both nickel and copper and the trackrecord of consistent on-time, on-budget major project delivery. "Our offer price is based on our normal valuation methodology using our standardpricing protocols and reflects WMC Resources' considerable expansion potential.We expect the acquisition to add material value to BHP Billiton shareholdersover the medium to long term," Mr Goodyear said. Specific benefits to BHP Billiton from this transaction include: • WMC Resources' nickel business comprises an outstanding set of assets, in terms of operating capability, country risk, scale and environmental standards, which will complement BHP Billiton's existing nickel business. The combined business will have a range of operations, products and technologies that will provide a robust and flexible platform for further growth. • BHP Billiton will have operating control of two of the world's four largest copper deposits. BHP Billiton's track record in developing and operating Escondida, the world's largest copper mine, ideally equips it to maximise the value of the large, long-life Olympic Dam resource base. Olympic Dam is the world's fourth largest copper resource and one of the world's 10 largest gold deposits. • The acquisition of WMC Resources will establish BHP Billiton as a major producer of uranium with the largest resource base in the world. Uranium is an important energy source in an increasingly energy intensive world. Not only is this valuable on a stand-alone basis but it complements BHP Billiton's existing energy portfolio of oil, gas and coal. • The inclusion of WMC Resources' businesses and opportunities in BHP Billiton's portfolio enhances its options to develop the production necessary to supply raw materials to high growth markets in the decades ahead. • BHP Billiton is best placed to maximise synergies in the nickel and copper businesses, marketing and other corporate functions. BHP Billiton will eliminate duplicate functions by using the proven systems and processes that were successfully used following the BHP Billiton merger in 2001. The annual corporate cost efficiencies are estimated to total A$115 million (US$91 million), with a one-time cost of A$120 million (US$95 million). Commenting on the attractiveness of the offer to WMC Resources' shareholders,WMC Resources CEO Andrew Michelmore said: "This offer supports the view of thevalue of WMC Resources that the Board has consistently held. We will be workingwith BHP Billiton to ensure that this recommended offer is put to shareholdersas soon as possible". The offer will be made through a subsidiary by way of an off-market takeover bidunder the Australian Corporations Act 2001 and will be funded from both new andexisting debt facilities. BHP Billiton remains committed to an A credit ratingand will retain financial flexibility following the acquisition. Following theacquisition, on a pro forma basis, BHP Billiton's net debt, as at 30 June 2005is estimated to total US$12.4 billion with corresponding net gearing of 42percent2. The acquisition is expected to be earnings accretive in the financialyear ending 30 June 2006. The offer is subject to a number of conditions including BHP Billiton receivingnecessary regulatory approvals and acquiring at least 90% of the number of WMCResources ordinary shares on issue. The conditions are outlined in full inAppendix 1 to this release. BHP Billiton holds economic exposure to 50.6 million WMC Resources shares (4.3%of the issued share capital) through cash settled derivative contracts. WMC Resources has entered into a Deed of Undertaking with BHP Billiton inrelation to BHP Billiton's offer. This includes a break-fee of A$92 million(US$73 million) payable to BHP Billiton in certain circumstances, including asuccessful competing takeover proposal. WMC Resources will provide full detailsof the Deed. BHP Billiton's Bidder's Statement is expected to be lodged shortly and to bedispatched to WMC Resources shareholders in approximately three weeks. Further information on WMC Resources can be found in Appendix 2 and on itsInternet site: www.wmc.com. Further information on BHP Billiton can be found inAppendix 3 and on our Internet site: www.bhpbilliton.com. For further information please contact:Australia United KingdomJane Belcher, Investor Relations Mark Lidiard, Investor & Media RelationsTel: +61 3 9609 3952 Mobile: +61 417 031 653 Tel: +44 20 7802 4156 Mobile: + 44 7769 934 942email: [email protected] email: [email protected] Price, Media Relations Ariane Gentil, Media RelationsTel: +61 3 9609 3815 Mobile: +61 419 152 780 Tel: +44 20 7802 4177 Mobile: +44 7881 518 715email: [email protected] email: [email protected] States South AfricaFrancis McAllister, Investor Relations Michael Campbell, Investor & Media RelationsTel: +1 713 961 8625 Mobile: +1 713 480 3699 Tel: +27 11 376 3360 Mobile: +27 82 458 2587email: [email protected] email: [email protected] BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209Registered in Australia Registered in England and WalesRegistered Office: 180 Lonsdale Street Melbourne Registered Office: Neathouse Place London SW1V 1BHVictoria 3000 United KingdomAustralia Telephone +44 20 7802 4000 Facsimile +44 20 7802 4111Telephone +61 1300 55 4757 Facsimile +61 3 9609 3015 The BHP Billiton Group is headquartered in Australia Further Information In connection with the planned public tender offer (the "Tender Offer") by awholly owned subsidiary of BHP Billiton (the "Company"), for all of WMCResources' outstanding stock, BHP Billiton will file with the United StatesSecurities and Exchange Commission (the "SEC") an informational document undercover of Form CB. Investors and holders of WMC Resources securities are stronglyadvised to read the informational document (when available) and any otherrelevant documents filed with the SEC, as well as any amendments and supplementsto those documents, because they will contain important information. Investorsand holders of WMC Resources securities may obtain free copies of theinformational document (when available), as well as other relevant documentsfiled with the SEC, at the SEC's website at www.sec.gov and will receiveinformation at an appropriate time on how to obtain transaction-relateddocuments for free from the Company or its duly designated agent. This communication is for information purposes only. It shall not constitute anoffer to purchase, sell or exchange or the solicitation of an offer to purchase,sell or exchange any securities of WMC Resources. The distribution of thiscommunication may, in some countries, be restricted by law or regulation.Accordingly, persons who come into possession of this document should informthemselves of and observe these restrictions. Forward-Looking Statements Statements contained in this communication may contain forward-lookingstatements with respect to BHP Billiton's financial condition, results ofoperations, business strategies, operating efficiencies, competitive position,growth opportunities for existing services, plans and objectives of management,markets for stock and other matters. Statements in these materials that are nothistorical facts are "forward-looking statements". These forward-looking statements, including, among others, those relating to thefuture business prospects, revenues and income of BHP Billiton, wherever theymay occur in this communication are necessarily estimates reflecting the bestjudgment of the senior management of BHP Billiton and involve a number of risksand uncertainties that could cause actual results to differ materially fromthose suggested by the forward-looking statements. As a consequence, theseforward-looking statements should be considered in light of various importantfactors, including those set forth in this communication and BHP Billiton'sAnnual Report on Form 20-F for the financial year ended 30 June 2004. Important factors that could cause actual results to differ materially fromestimates or projections contained in the forward-looking statements include,without limitation: the success of the proposed Tender Offer; estimatedreserves; plans, strategies and objectives of management; closure or divestmentof certain operations or facilities (including associated costs); anticipatedproduction or construction commencement dates; expected costs or productionoutput; the anticipated productive lives of projects, mines and facilities; andprovisions and contingent liabilities. BHP Billiton undertakes no obligation to update publicly or release anyrevisions to these forward-looking statements to reflect events or circumstancesafter the date of the materials in which such statements are contained or toreflect the occurrence of unanticipated events. APPENDIX 1 CONDITIONS OF THE OFFER The Offer is subject to the fulfilment of the following conditions: (a) Minimum acceptance condition During, or at the end of, the offer period the number of WMC Resources Shares in which BHP Billiton and its associates together have relevant interests (disregarding any relevant interest that BHP Billiton has merely because of the operation of section 608(3) of the Corporations Act) is at least 90% of all the WMC Resources Shares (even if that number later becomes less than 90% of all the WMC Resources Shares as a result of the issue of further WMC Resources Shares). (b) Foreign investment approval One of the following occurs before the end of the offer period: (i) BHP Billiton receives written notice issued by or on behalf of the Treasurer stating that there are no objections under the Australian government's foreign investment policy to the acquisition by BHP Billiton of all of the WMC Resources Shares under the Offer, such notice being unconditional; (ii) the expiry of the period provided under the Foreign Acquisitions and Takeovers Act 1975 (Cth) ("FATA") during which the Treasurer may make an order or an interim order under the FATA prohibiting the acquisition of WMC Resources Shares under the Offer, without such an order being made; or (iii) if an interim order is made to prohibit the acquisition of WMC Resources Shares under the Offer, the subsequent period for making a final order has elapsed, without any such final order being made. (c) Hart-Scott-Rodino Before the end of the offer period, all filings required under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act") have been made and all applicable waiting periods under the HSR Act have expired or have been terminated. (d) European Union merger control Before the end of the offer period: (i) the European Commission has issued a decision under Article 6(1)(a) of Council Regulation (EC) 139/2004 (the "Merger Regulation") that the acquisition of all or any of the WMC Resources Shares as a result of the Offer ("Acquisition") does not give rise to a concentration falling within the scope of the Merger Regulation; (ii) the European Commission has issued a decision under Article 6(1)(b) of the Merger Regulation declaring the Acquisition compatible with the common market, or is deemed to have done so under Article 10(6) of the Merger Regulation; (iii) in the event of the European Commission initiating proceedings under Article 6(1)(c) of the Merger Regulation and BHP Billiton waiving condition (d)(ii) above, the European Commission has issued a decision under Article 8(1) or 8(2) of the Merger Regulation declaring the Acquisition compatible with the common market, or is deemed to have done so under Article 10 (6) of the Merger Regulation; or (iv) in the event that the European Commission refers the whole or part of the Acquisition to the competent authorities of one or more Member States under Article 9(3) of the Merger Regulation, (A) each such authority has granted a clearance in respect of all those parts of the Acquisition which were referred to it, or is deemed to have granted such a clearance; and (B) the requirements of sub-paragraphs (d)(ii) or (d)(iii) are satisfied with respect to any part not referred to the competent authority of any Member State. (e) ACCC Before the end of the offer period, BHP Billiton receives written notice from the ACCC that the ACCC does not propose to intervene in the acquisition of WMC Resources Shares under the Offer or the completion of any transaction contemplated by the Bidder's Statement, such notice being unconditional. (f) Approvals by Public Authorities Before the end of the offer period: (i) BHP Billiton receives all licences, authorities, consents, approvals, orders, waivers, relief, rulings and decisions ("Approvals") (other than those referred to in paragraphs (b) to (e)) which are required by law or by any Public Authority to permit the Offers to be made to and accepted by WMC Resources shareholders in all applicable jurisdictions; and (ii) BHP Billiton receives all Approvals (other than those referred to in paragraphs (b) to (e)) which are required by law or by any Public Authority as a result of the Offers or the successful acquisition of the WMC Resources Shares and which are necessary for the continued operation of the business of WMC Resources and its subsidiaries or of any member of the BHP Billiton Group, and, in each case, those Approvals are on an unconditional basis and remain in force in all respects and there is no notice, intimation or indication of intention to revoke, suspend, restrict, modify or not renew those Approvals. For the purpose of these conditions, "Public Authority" means any government or any governmental, semi-governmental, administrative, statutory or judicial entity, authority or agency, whether in Australia or elsewhere, including the ACCC (but excluding the Takeovers Panel, ASIC and any court in respect of proceedings under section 657G or proceedings commenced by a person specified in section 659B(1) of the Corporations Act in relation to the Offer). It also includes any self-regulatory organisation established under statute or any stock exchange. (g) No action by Public Authority adversely affecting the Offer During the period from and including the date of this announcement ("Announcement Date") to the end of the offer period: (i) there is not in effect any preliminary or final decision, order or decree issued by a Public Authority; (ii) no action or investigation is instituted, or threatened by any Public Authority; and (iii) no application is made to any Public Authority (other than an application by BHP Billiton or any company within the BHP Billiton Group), in consequence of, or in connection with, the Offer, which restrains, prohibits or impedes, or threatens to restrain, prohibit or impede, or may otherwise materially adversely impact upon, the making of the Offer or the completion of any transaction contemplated by the Bidder's Statement or the rights of BHP Billiton in respect of WMC Resources and the WMC Resources Shares to be acquired under the Offer or otherwise, or seeks to require the divestiture by BHP Billiton of any WMC Resources Shares, or the divestiture of any assets by WMC Resources or by any subsidiary of WMC Resources or by any member of the BHP Billiton Group. (h) No prescribed occurrences None of the following events happens during the period beginning on the date the Bidder's Statement is given to WMC Resources and ending at the end of the offer period: (i) WMC Resources converts all or any of its shares into a larger or smaller number of shares; (ii) WMC Resources or a subsidiary of WMC Resources resolves to reduce its share capital in any way; (iii) WMC Resources or a subsidiary of WMC Resources: (A) enters into a buy-back agreement; or (B) resolves to approve the terms of a buy-back agreement under section 257C(1) or 257D(1) of the Corporations Act; (iv) WMC Resources or a subsidiary of WMC Resources issues shares (other than WMC Resources Shares issued as a result of exercise of WMC Resources Options) or grants an option over its shares, or agrees to make such an issue or grant such an option; (v) WMC Resources or a subsidiary of WMC Resources issues, or agrees to issue, convertible notes; (vi) WMC Resources or a subsidiary of WMC Resources disposes, or agrees to dispose, of the whole, or a substantial part, of its business or property; (vii) WMC Resources or a subsidiary of WMC Resources charges, or agrees to charge, the whole, or a substantial part, of its business or property; (viii) WMC Resources or a subsidiary of WMC Resources resolves to be wound up; (ix) a liquidator or provisional liquidator of WMC Resources or of a subsidiary of WMC Resources is appointed; (x) a court makes an order for the winding up of WMC Resources or of a subsidiary of WMC Resources; (xi) an administrator of WMC Resources, or of a subsidiary of WMC Resources, is appointed under section 436A, 436B or 436C of the Corporations Act; (xii) WMC Resources or a subsidiary of WMC Resources executes a deed of company arrangement; or (xiii) a receiver, or a receiver and manager, is appointed in relation to the whole, or a substantial part, of the property of WMC Resources or of a subsidiary of WMC Resources. (i) No prescribed occurrences between the Announcement Date and service None of the events listed in sub-paragraphs (i) to (xiii) of paragraph (h) happens during the period beginning on the Announcement Date and ending at the end of the day before the Bidder's Statement is given to WMC Resources. (j) No material acquisitions, disposals or changes in the conduct of WMC Resources' business During the period from and including the Announcement Date to the end of the offer period, none of WMC Resources, or any subsidiary of WMC Resources: (i) acquires, offers to acquire or agrees to acquire one or more shares, companies or assets (or an interest in one or more shares, companies or assets) for an amount in aggregate greater than A$300 million; (ii) disposes, offers to dispose or agrees to dispose of its interest (in whole or in part and whether directly or indirectly) in the Olympic Dam operation, WMC Resources' nickel operation or the Corridor Sands mineral sands project (each a "Relevant Asset"). To avoid any doubt, a disposal of, an offer to dispose or an agreement to dispose of one or more shares or interests in a company or entity which owns an interest in a Relevant Asset is taken to be a disposal of, an offer to dispose or an agreement to dispose of (as the case may be) an interest in the Relevant Asset; (iii) enters into or offers to enter into any joint venture, asset or profit sharing, partnership, merger of businesses (including through a dual listed companies structure) or of corporate entities, in respect of any Relevant Asset; (iv) other than in the ordinary course of business, incurs, commits to or brings forward the time for incurring, or grants to another person a right the exercise of which would involve WMC Resources or any subsidiary of WMC Resources incurring or committing to, any capital expenditure or liability, or foregoes any revenue, for one or more related items or amounts of greater than A$50 million; or (v) discloses (without having disclosed to ASX prior to the Announcement Date) the existence of any matter described in sub-paragraphs (i) to (iv) above, or announces an intention or proposal to do anything described in sub-paragraphs (i) to (iv) above. For the avoidance of doubt, a reference in this paragraph (j) to: (A) the Olympic Dam operation is to the Olympic Dam minerals processing operation (which produces copper, uranium oxide, gold and silver), and the mine and assets used in connection with that operation (including all land holdings and assets in and around the township of Roxby Downs), of WMC Resources (or any subsidiary of it); (B) WMC Resources' nickel operation is to the nickel business carried on by the WMC Resources Group including the: (I) mines and concentrators at Leinster and Mount Keith; (II) concentrator at Kambalda; (III) smelter at Kalgoorlie; (IV) refinery at Kwinana; and (V) other nickel related projects, of WMC Resources (or any subsidiary of it). (k) Non-existence of certain rights No person (other than a member of the BHP Billiton Group) has or will have any right (whether subject to conditions or not) as a result of BHP Billiton acquiring WMC Resources Shares to: (i) acquire, or require the disposal of, or require WMC Resources or a subsidiary of WMC Resources to offer to dispose of, any material asset of WMC Resources or a subsidiary of WMC Resources; or (ii) terminate, or vary the terms or performance of, any material agreement with WMC Resources or a subsidiary of WMC Resources. (l) No material adverse change During the period from and including the Announcement Date to the end of the offer period: (i) there is no occurrence or matter, including (without limitation): (A) any change in the status or terms of arrangements entered into with WMC Resources or any of its subsidiaries or the status or terms of any Approvals which are applicable to WMC Resources or any of its subsidiaries (whether or not wholly or partly attributable to the making of the Offer, and/or the acquisition of WMC Resources Shares under the Offer); (B) any change in the 30 day moving average spot price for any commodity on any market, as expressed in Australian dollars; (C) any liability for duty or tax; (D) any liability resulting from a change of control of WMC Resources; or (E) any change in the law (whether retrospective or not), that (individually or together with others) has or could reasonably be expected to have a materially adverse effect on the assets, liabilities, financial or trading position, profitability, production or prospects of WMC Resources and its subsidiaries taken as a whole; and (ii) no occurrence or matter, as described in sub-paragraph (l)(i), which occurred before the Announcement Date but was not apparent from publicly available information before then, becomes public. (m) S&P/ASX 200 index During the period from and including the Announcement Date to the end of the offer period, the S&P/ASX 200 index does not fall below 3,500 on any trading day. APPENDIX 2 WMC RESOURCES OVERVIEW WMC Resources is a major diversified Australian resources company involved inthe exploration and production of nickel, copper, uranium oxide and phosphatefertilisers with operations in South Australia, Western Australia andQueensland. The company is headquartered in Melbourne. WMC Resources has its primary listing on the Australian Stock Exchange and ADRstraded on the New York Stock Exchange For the year ended 31 December 2004, WMC Resources reported a consolidated netprofit after tax of A$1,327m (US$1,035m1), generated on sales of A$3,777m(US$2,946m1). As at 31 December 2004, consolidated net assets were A$5,109m(US$3,985m1) The principal operations of WMC Resources are:NickelMining operations are located at Leinster, Mount Keith, and Kambalda in WesternAustralia. WMC Resources also operates a smelter at Kalgoorlie and refinery atKwinana, Western AustraliaCopper/UraniumOlympic Dam in South Australia produces refined copper, uranium oxide, gold andsilver. Olympic Dam, in addition to being a major copper and gold deposit, isthe world's largest known uranium depositFertilisersWMC Resources' operations at Phosphate Hill and Mt Isa in Queensland producemono- and di-ammonium phosphate for the domestic and export marketMineral sandsCorridor Sands is a large undeveloped titanium dioxide-bearing mineral sandsdeposit in southern Mozambique. APPENDIX 3 BHP BILLITON OVERVIEW BHP Billiton is the world's largest diversified resources company. It hasapproximately 35,000 employees working in more than 100 operations inapproximately 20 countries. BHP Billiton occupies industry leader or nearindustry leader positions in major commodity businesses, including aluminium,energy coal and metallurgical coal, copper, ferro-alloys, iron ore and titaniumminerals, and has substantial interests in oil, gas, liquefied natural gas,nickel, diamonds and silver. The Company is headquartered in Melbourne,Australia. BHP Billiton is a Dual Listed Company (DLC) comprising BHP Billiton Limited andBHP Billiton Plc. The two entities exist as separate companies, but operate as acombined group. Both companies have identical Boards of Directors and are run bya unified management team. BHP Billiton is listed on the Australian StockExchange (through BHP Billiton Limited) and London Stock Exchange (through BHPBilliton Plc), along with a secondary listing on the Johannesburg Stock Exchange(through BHP Billiton Plc) and American Depositary Receipts listings on the NewYork Stock Exchange. For the six months ended 31 December 2004, BHP Billiton reported earnings beforeinterest, tax, depreciation, impairments and amortisation (EBITDA) of US$5.2billion and had turnover (including the Group's share of joint ventures) ofUS$15.5 billion. As of 7 March BHP Billiton's market capitalization was US$90.2billion. BHP Billiton has seven Customer Sector Groups: AluminiumBHP Billiton is one of the world's major producers of alumina and aluminium. Its principal assets are located in South Africa, Brazil, Mozambique, Australiaand Suriname. Base MetalsBHP Billiton is a leading supplier of lead, zinc and copper concentrates. BHPBilliton produces high-quality copper cathode (metal) and is also a leadingproducer of silver in concentrate. It has operations in Chile, Peru andAustralia. Carbon Steel MaterialsBHP Billiton is a leading supplier of iron ore, metallurgical coal and manganeseore and alloys to the global steel industry. It has mining and processingoperations in Australia, South Africa and Brazil. Diamonds and Specialty ProductsThis business produces diamonds, titanium slag, rutile and zircon and includesBHP Billiton's minerals exploration and technology activities. The Ekati diamondoperation is in Canada and the titanium minerals operations are located inRichards Bay, South Africa. Energy CoalBHP Billiton is one of the world's largest producers and marketers of exportthermal coal. It is also a major supplier to domestic markets. It has operationsin South Africa, United States, Colombia and Australia. PetroleumBHP Billiton is a significant oil and gas exploration and production business.Principal activities are oil and natural gas production, exploration anddevelopment in Australia, the United Kingdom, the United States, Algeria,Trinidad and Tobago and Pakistan. Stainless Steel MaterialsBHP Billiton is a market leading producer of primary nickel and ferrochrome. Itskey operations are located in Colombia, South Africa and Australia. BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209Registered in Australia Registered in England and WalesRegistered Office: Level 27, 180 Lonsdale Street Melbourne Registered Office: Neathouse Place London SW1V 1BH UnitedVictoria 3000 KingdomTelephone +61 1300 554 757 Facsimile +61 3 9609 3015 Telephone +44 20 7802 4000 Facsimile +44 20 7802 4111 The BHP Billiton Group is headquartered in Australia This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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