BHP takes another bite at Anglo bid
MULLING IMPROVED OFFER Miner back in talks with key shareholders and is trying to convince them to back takeover.
BHP Group is considering making an improved proposal for Anglo American after its $39 billion (about R733 billion) initial offer was rejected by the London-listed miner, according to people familiar with the matter.
The Australian mining company is discussing with its advisors a revised proposal for Anglo American in the coming weeks, they said, asking not to be identified as the matter is private.
BHP is also in the process of discussing the merits of a deal with its key shareholders and trying to convince them to back the offer, they added.
BHP’s deliberations are ongoing and it hasn’t made a final decision on the size and structure of the new proposal.
A BHP spokesperson declined to comment on the matter.
Anglo has rejected an all-share deal in which it would spin off controlling stakes in South African platinum and iron ore companies to its shareholders before being acquired by BHP.
The total per-share value of the non-binding proposal was about £25.08, BHP said.
Anglo chair Stuart Chambers called the proposal “opportunistic”.
“The BHP proposal is opportunistic and fails to value Anglo American’s prospects,” Chambers said in a statement.
A tie-up with Anglo would give BHP roughly 10% of global copper mine supply ahead of an expected shortage that many market watchers have predicted will send prices soaring.
If successful, the transaction would mark a return to large-scale dealmaking for BHP.
Anglo has long been viewed as a potential target among the largest miners, particularly because it owns attractive South American copper operations at a time when most of the industry is eager to add reserves and production.
Still, suitors have been put off by Anglo’s complicated structure and mix of other commodities from platinum to diamonds, and especially its deep exposure to South Africa.
BHP had sought to navigate that challenge by insisting that Anglo separate its two SA units as a condition of a takeover.
This was also dismissed by Anglo on Friday with the company saying it was unappealing to its investors. “The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders,” Chambers said.
Within 24 hours of BHP’s pursuit coming to light, SA – as many have always expected in a deal involving Anglo – has started to move to centre stage.
Its state-owned pension fund is Anglo’s biggest shareholder and on Thursday, Mineral Resources and Energy Minister Gwede Mantashe signalled his opposition to the deal.
“I wouldn’t support it,” Mantashe said. “I don’t think Anglo will agree to that. I wouldn’t if I was on the board.”
Proposal is opportunistic and fails to value Anglo