Anglo rejects improved all-share takeover proposal from BHP

Anglo rejects improved all-share takeover proposal from BHP
Anglo rejects improved all-share takeover proposal from BHP

BHP increased its all-share takeover proposal for Anglo American by offering 0.8132 shares for each Anglo share – an improvement that was today (May 13) rejected by Anglo.

“We are disappointed that this second proposal has been rejected,” said Mike Henry, CEO of BHP in a statement to the London Stock Exchange.

The second proposal was tabled with Anglo on May 7, therefore news of today’s rejection by Anglo could suggest the beginning of the UK-listed firm’s fight back.

So far, Anglo has kept its advice on BHP’s approach save to say the proposal undervalued the firm and was too complex.

BHP’s revised proposal represents a 15% increase in the merger exchange ratio and increases the proposed aggregate ownership of Anglo shareholders in the combined group to 16.6% compared to 14.8% in BHP’s first proposal on April 25.

BHP’s revised proposal values ​​Anglo at £34bn or £27.53 per share including Anglo American Platinum (£4.86/share) and Kumba Iron Ore (£3.40/share) shares. As per BHP’s first proposal for Anglo, the Johannesburg-listed subsidaries would first be unbundled to shareholders.

Shares in Anglo dropped 1.72% in Johannesburg shortly after the announcement suggesting investors considered BHP’s to represent fair value. Analysts have said over the past two weeks that BHP would not progress a formal offer beyond £30/share.

Henry said the combination of Anglo – which would be offered two seats on BHP’s board in terms of the revised proposal – was “a strategic fit” citing “significant synergies”.

 
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