Anglo American rejects third BHP offer, extends deadline

Anglo American has rejected the third takeover proposal from BHP (ASX: BHP) after the latter put forward a new offer on May 20, 2024.

Under the terms of the latest proposal, Anglo American shareholders would receive 0.8860 BHP shares and ordinary shares in Anglo American Platinum and Kumba Iron Ore for every Anglo American share held.

This offer represents a total value of $59.77 (£31.11) per Anglo American share including $10.37 (£5.40) in Anglo Platinum shares and $8.13 (£4.23) in Kumba shares. This revised proposal represents an 11.3% increase in the spot aggregate value per Anglo American share.

BHP chief executive Mike Henry commented on the proposal.

“BHP’s revised proposal will offer immediate value for Anglo American shareholders and allow them to benefit from the long-term value generation of the combined group,” he said.

“BHP looks forward to engaging with the board of Anglo American to explore this unique and compelling opportunity to bring together two highly complementary, world class businesses.”

The proposal process is expected to take 18 months or more to complete and carries significant execution and completion risks relating to value and time.

Anglo American is confident in its standalone future prospects which are expected to unlock significant and undiluted value for its shareholders.

Further, Anglo American believes there continues to be serious concerns with the structure given that it’s likely to result in material completion risk and value impact that disproportionately falls on Anglo American’s shareholders.

Taking into account these considerations, Anglo American has unanimously rejected the latest proposal.

Anglo American chairman Stuart Chambers commented on the rejection.

“The board considered BHP’s latest proposal carefully, concluded it does not meet expectation of value delivered to Anglo American’s shareholders and has unanimously rejected it,” he said.

“In particular, it does not address the Board’s concerns about the structure, which results in significant complexity, execution risks, an extended timeline to completion and consequently has the potential for material value leakage to be disproportionately suffered by Anglo American’s shareholders.

“Multiple engagements with the BHP team have not yet been able to resolve the concerns on these issues.”

To allow for further engagement with BHP, Anglo American has requested an extension to the date by which BHP is required to either announce a firm intention to make an offer or announce it doesn’t intend to make an offer.

The deadline has been extended to May 29, 2024.