Anglo American extends BHP takeover deadline after rejecting improved bid

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Anglo American has extended talks with BHP over a takeover bid, helping to keep alive the prospect of the biggest ever deal in the mining sector, even after the group’s listing in the UK rejected a third £38.6bn approach.

BHP now has until 5pm UK time on May 29 to make a formal bid for the smaller rival after increasing the number of shares on offer to Anglo investors in the third deal proposal and finally”.

brother will continue to work with BHP for another week, despite saying it continues to have “serious concerns” about the complex deal structure that requires it to separate its two South African units.

The extension keeps alive BHP’s hopes that it can still secure a deal that will transform the global mining industry and give the Australian company access to more copper, a metal vital to the process. decarbonization.

BHP said in a separate statement on Wednesday that its third all-share offering values ​​Anglo at 31.11 pounds a share based on the May 22 closing price.

It said the preliminary offer was the “final offer rate” but added that it could be increased subject to certain conditions such as Anglo’s board agreeing to propose a higher bid or a higher price. bid from a rival company to Anglo.

Anglo’s board unanimously rejected the third proposal. Chairman Stuart Chambers said the bid “did not meet expectations in terms of value delivered for Anglo American shareholders” but the board was “ready to continue to engage with BHP and its advisers on the subject.” this topic”.

Ben Davis, a mining analyst at Liberum, said the late change meant a deal was still possible but Anglo’s opposition to spinning off its South African business first remained a problem. “Final offers are never final and the door remains open, but it is difficult to see how to ensure BHP’s proposed structure is ‘safe’,” he said.

The pence-adjusted share price chart shows Anglo's shares lagging behind rivals even after BHP's proposal

Anglo said the latest proposal values ​​its shares at 29.34 pounds based on the closing share price on April 23, before news of the merger talks became public. Previous BHP offers values ​​Anglo at £27.53 per share, or £34 billion. It initially offered a price of £25 a share, or £31 billion.

According to BHP, the deal will give Anglo shareholders a 17.8% stake in BHP and a 47% premium to Anglo’s share price before news of the merger talks became public.

of BHP CEO Mike Henry said the company “looks forward to working with Anglo American’s board to explore this unique and exciting opportunity to bring together two highly complementary, world-class businesses.”

News of BHP’s improved bid comes hours after the Public Investment Corporation, South Africa’s state investor and Anglo’s second-largest shareholder, said BHP needed to make a “revision meaningful change” to your proposal.

Anglo said in a statement: “The board continues to believe that there are serious structural concerns as it has the potential to lead to material completion risks and value impacts for its shareholders. disproportionately Anglo American.”

Last week Anglo revealed a dramatic turnaround plan to disrupt itself by splitting off its coal, diamond and platinum metallurgical divisions in a bid to divest BHP.

BHP’s proposal to separate two units exists controversial in South Africa in an election year as BHP was seen as carrying out a vote of no confidence in the country.

Anglo shares fell below 1% at 26.69 pounds in afternoon trading in London.

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