Anglo American Rejects Third £38.6 Billion Takeover Bid from BHP

Anglo American has rejected a third £38.6 billion takeover proposal from BHP Group, but allowed a one-week extension for a binding offer. The move underscores concerns over execution risks and value leakage, while demands for copper driven by AI and renewable energy remain high.

Anglo American on Wednesday rejected a third takeover proposal from BHP Group that valued the company at 38.6 billion pounds ($49.18 billion), but agreed to a one-week extension for its rival to table a binding offer. The move marks the third unsuccessful offer in a month from BHP, the world's biggest listed mining group, as Anglo works on a radical plan to divest its less profitable coal, nickel, diamond and platinum businesses.

The 29.34 pounds per share approach, based on undisturbed share prices at market close on April 23 and raised from an initial 25.08 pounds, is still conditional on Anglo un-bundling its platinum and iron ore assets in South Africa, the country where it was founded and has deep roots, employing more than 40,000 people. Anglo reiterated that this condition carries significant execution and completion risks.

BHP's proposal "does not address the Board's concerns about the structure, which results in significant complexity, execution risks, an extended timeline to completion," Anglo chairman Stuart Chambers said in a statement. "(It) consequently has the potential for material value leakage to be disproportionately suffered by Anglo American's shareholders," he added.

Anglo's share price reversed earlier losses at 27.15 pounds, up 1% by 1344 GMT. BHP said in a separate statement that it will not increase the percentage of its shares it is offering Anglo's shareholders as part of the deal, unless a third party makes a competing offer.

Analysts at JP Morgan

last week said BHP would need to boost its offer by around 30% to reflect fair value for Anglo and its prized copper assets in Chile and Peru. Developments such as artificial intelligence and automation, and the energy transition including electric vehicles and renewable energy, have driven up demand prospects for copper cable used to conduct electricity. ($1 = 0.7849 pounds)

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