Anglo chairman hits back over £31bn BHP bid

The chairman of Anglo American came out fighting yesterday as he rejected a £31bn takeover by BHP.

Stuart Chambers – who has a record of selling British businesses, including Arm – said the offer for the London-listed mining giant by its Australian rival was ‘opportunistic’ and ‘significantly undervalues Anglo American and its future prospects’.

The comments came amid speculation of a possible bidding war for Anglo, with analysts expecting Glencore and Rio Tinto to launch their own bids.

‘This is far from over,’ said Neil Wilson, chief market analyst at Markets.com.

A string of higher bids would severely test the resolve of Chambers and the rest of the Anglo board. Activist hedge fund elliott Investment Management – which is led by Paul Singer and is known for its aggressive tactics – is likely to have a say in the outcome, having become a top ten shareholder with an £800m stake in Anglo.

Chambers, 67, has a colourful history of corporate deal-making.

He was chief executive of British glass maker Pilkington when it was bought by Japanese giant Nippon Sheet Glass in 2005. he was also chairman of Rexam when the FTSE 100 drinks can manufacturer was snapped up by its US rival Ball Corporation for £4.5bn in 2016. But perhaps his biggest move came as chairman of Arm where he oversaw the sale of the Cambridge-based chipmaker to Japan’s Softbank in the same year.

Yesterday, he said: ‘The BHP proposal is opportunistic and fails to value Anglo American’s prospects.

‘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.’

Kaan Peker, an analyst at RBC Capital Markets, said the initial offer from BHP looked opportunistic, adding: ‘A higher premium will likely be required for the deal to close.’ Ben Davis, analyst at Liberum, said there was definite reluctance from Chambers and the board to accept a low ball offer for another British jewel – citing the ‘emotional and political backlash’ of selling the company off.

he added that it was ‘very hard to see Anglo entertaining anything less than £33.3bn’ or £27.50 per share.

Analysts at Jefferies said it would take ‘a price of at least £28 per Anglo share before Anglo would seriously consider an offer’.

Joshua Mahony, chief market analyst at Scope Markets, said that while the opening offer from BhP has been rejected ‘more are likely to follow as their enviable copper assets bring expectations of further interest’.