Mining giant BHP has moved closer to snaring smaller rival OZ Minerals after lifting its takeover offer for the copper and nickel miner to $9.6 billion.
The world's biggest miner lifted its cash offer to $28.25 a share, a 7.4 per cent premium to OZ Minerals' last close.
The revised offer price is a 13 per cent increase on the $25 a share proposal the target's board rejected in August, calling it "opportunistic".
OZ Minerals on Friday said it would grant BHP due diligence for four weeks from November 21 on an exclusive basis, with its board supporting the bid.
"The intention of the OZ Minerals board is to unanimously recommend the revised proposal as being in the best interests of OZ Minerals' shareholders in the absence of a superior proposal," it said.
By 1430 AEDT, BHP shares were trading 0.4 per cent higher at $43.99 in a firm Australian market.
OZ Minerals shares were up 4.1 per cent to $27.39 after coming out of a trading halt following the announcement of the new offer but are still trading below the offer price.
The deal comes at a time of rapidly growing demand for battery metals such as lithium, copper and nickel amid the surging global popularity of electric vehicles.
BHP Chairman Ken MacKenzie said the proposed deal would provide value to his shareholders by increasing the global miner's exposure to future-facing commodities, attractive synergies and "adding to our pipeline of growth options".
The transaction, if successful, will allow BHP to consolidate its copper holdings in South Australia, where OZ's Prominent Hill and Carrapateena mines operate adjacent to BHP's Olympic Dam mine and smelting operations.
It would also allow the combination of BHP's Nickel West operations in Western Australia with OZ's West Musgrave copper-nickel operation.
OZ had recently outlined plans to invest more than $1 billion in West Musgrave, which is expected to produce about 35,000 tonnes of nickel and 41,000 tonnes of copper annually in the first five years of production.
Such an investment could prove rewarding for the cash-rich BHP at a time when copper prices are trading at an almost five-month high on the back of China's moves to relax its COVID-19 restrictions and a looming supply shortfall.
Demand for the industrial metal is expected to rise further amid a global transition to clean energy.
The BHP OZ tie-up comes weeks after rival Rio Tinto made a play to take full control of Canada's Turquoise Hill Resources in an effort to boost its stake in the massive Oyu Tolgoi copper and gold project in Mongolia.
