Morgan Stanley believes the acquisition of OZ Minerals ((OZL)) is "sensible", given the renewed focus by BHP Group on copper as a future facing commodity.

OZ Minerals will seek approval of the scheme in the Federal Court with the scheme expected to become effective on April 18. 

Net debt is expected to be in the upper half of the company's US$5-15bn range post completion and, the broker warns, adding current provisions of US$3.3bn could affect its ability to pay dividends that are higher than the minimum of 50% EPS in the future when these provisions eventuate.

The Equal-weight rating and $41.35 target are unchanged. Sector view is Attractive.

Sector: Materials.

Target price is $41.35.Current Price is $46.45. Difference: ($5.10) - (brackets indicate current price is over target). If BHP meets the Morgan Stanley target it will return approximately -12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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