Anglo American has rejected another takeover bid from BHP despite a 15 per cent increase on the previous offer. So, what now? Australian Mining investigates.
The latest offer, announced on Monday, valued each Anglo share at 0.8132 BHP shares, up from 0.7097 BHP shares proposed in April.
Anglo swiftly rejected the proposal, which added another $4.4 billion to BHP’s original $60 billion offer.
BHP chief executive officer Mike Henry said he was disappointed the second proposal was rejected.
“BHP and Anglo American are a strategic fit and the combination is a unique and compelling opportunity to unlock significant synergies by bringing together two highly complementary, world class businesses,” Henry said.
“The combined business would have a leading portfolio of high-quality assets in copper, potash, iron ore and metallurgical coal and BHP would bring its track record of operational excellence to maximise returns from these high-quality assets.”
But Anglo said the Big Australian’s stipulation of a demerger between Anglo and Anglo American Platinum and Kumba Iron Ore was “highly unattractive”.
“The latest proposal from BHP again fails to recognise the value inherent in Anglo American,” Anglo chair Stuart Chambers said. “The BHP proposal also continues to have a highly unattractive structure.
“This leaves Anglo American, its shareholders and stakeholders disproportionately at risk from the substantial uncertainty and execution risk created by the proposed inter-conditional execution of two demergers and a takeover.”
Anglo American Platinum and Kumba Iron Ore shareholdings are currently worth approximately $US15 billion ($22.7 billion), which is 34 per cent of BHP’s offer.
Chambers said Anglo has a strong future ahead, indicating it would take a lot more from BHP to get the major to budge.
“Anglo American shareholders are well positioned to benefit from increasing demand from future enabling products while the increasing capital intensity to bring greenfield supply online makes proven assets with world class resource endowments ever more attractive,” he said.
“The Anglo American team is focused on delivering against its strategic priorities of operational excellence, portfolio simplification and growth and is set to accelerate delivery in order to unlock this inherent value.”
BHP now has until May 22 to lob another offer or remove its hat from the ring.
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.
