Anglo American rejects $59b BHP proposal

Anglo American has rejected BHP’s $59.57b (£31.1b) proposal as it “significantly undervalues Anglo American and its future prospects”.

Additionally, Anglo American’s board believes the proposal contemplates a structure which is highly unattractive for the company’s shareholders, given the uncertainty and complexity in the proposal and significant execution risks.

Anglo American chairman Stuart Chambers commented on the rejection of the proposal.

“The BHP proposal is opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value upside participation of Anglo American’s shareholders relative to BHP’s shareholders,” he said.

“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.

“With copper representing 30% of Anglo American’s total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products, the board believes that Anglo American’s shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materialises.”

Mid last week, Anglo American confirmed it had received an unsolicited, non-binding and highly conditional proposal from BHP.

The original proposal outlined Anglo American shareholders receiving 0.7097 BHP shares for every Anglo share, plus ordinary shares in Anglo American Platinum and Kumba Iron Ore.

The deal represents a value of $48.04 (£25.08) per Anglo American share, $9.31 (£4.86) in Anglo Platinum shares and $6.51 (£3.40) in Kumba shares.

By no later than 5pm on May 22, 2024, BHP must announce a firm intention to make an offer for Anglo American or announce it does not intend to make an offer.