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BHP’s Improved Takeover Proposal Rejected by Anglo American in £34bn Battle

In a high-stakes showdown between mining giants, Anglo American has turned down an enhanced takeover offer from rival BHP, valuing the UK-listed miner at a whopping £34 billion. The rejection intensifies the battle between the two titans of the global mining industry.

BHP’s latest non-binding, all-share proposal valued Anglo at £27.53 per share, a significant increase from the original offer of approximately £25 per share made last month. The Australian group stated that this new bid represented a 15% increase in the merger ratio from its previous proposal and offered a 30% premium to Anglo’s share price before takeover talks were made public.

Expressing disappointment, BHP mentioned that the Anglo American board chose not to engage in discussions regarding the revised offer. The Australian miner clarified that this new approach did not signify a firm intention to make an offer and has until next Wednesday to decide whether to proceed with a formal bid.

On the other hand, Anglo reiterated that BHP’s revised offer still undervalued the company’s assets and prospects significantly. The board stated that the structure of the proposal was “highly unattractive” for shareholders, echoing their rejection of a previous unsolicited £31 billion takeover attempt from BHP.

Following the news, Anglo’s shares fell by 2.4% to £27.07 in London, giving the company a market value of £33 billion. BHP’s latest move, announced just before a major industry gathering in Miami, puts pressure on Anglo’s chief executive, Duncan Wanblad, to demonstrate that a standalone strategy would deliver better returns for investors.

BHP’s interest in Anglo’s copper mines in Latin America has sparked the potential for creating the world’s largest producer of this critical metal for decarbonization efforts. Additionally, the merger would expand BHP’s presence in iron ore and steelmaking coal, making it the largest deal in the mining sector’s history.

Despite the rejection, BHP’s CEO Mike Henry described the proposal as a “win-win” scenario that would increase Anglo shareholders’ ownership in the combined company. However, the provision requiring Anglo to spin off two South African businesses before the transaction has faced backlash from Pretoria.

As the saga continues, industry experts and shareholders await Anglo’s response and the unveiling of their strategic plans. With speculation rife about the company’s future, including potential buyouts or breakups, the mining sector is bracing for further developments in this high-stakes battle for dominance.

Stay tuned for more updates on this unfolding story.