Anglo American rejects rival BHP’s £34bn second takeover bid

By Jessica Clark

Updated: 22:07 BST, 13 May 2024

Anglo American has rejected a second takeover offer from BHP – branding the £34billion bid ‘highly unattractive’.

The London-listed mining giant said the latest proposal from its Australian rival ‘continues to significantly undervalue’ the company.

And Anglo bosses – who last month dismissed BHP’s first £31billion bid as ‘too low’ and ‘highly opportunistic’ – will today update investors on their plans for the business to thrive on its own.

The latest rejection triggered an angry response from BHP, the world’s biggest miner, which said it was ‘disappointed’ Anglo had ‘chosen not to engage’ with the board over the new proposal.

It sets the scene for what could be a testy meeting today when BHP boss Mike Henry and his Anglo counterpart Duncan Wanblad cross paths at a mining conference in Miami.

Anglo American chief Duncan Wanblad

Anglo American chief Duncan Wanblad

Clash: BHP boss Mike Henry, left, and his Anglo counterpart Duncan Wanblad, right, are due to cross paths at a mining conference in Miami

The pair are expected to hold talks off-stage.

Henry yesterday insisted the new offer is a ‘win-win’ for shareholders of both companies and said he was ‘disappointed’ Anglo rebuffed the bid.

The revised bid would increase Anglo shareholders’ ownership of the combined group to 16.6 per cent from the 14.8 per cent outlined in last month’s offer.

But the offer is still £6billion less than the £40billion analysts have said it could take to get a deal over the line.

And the new proposal maintains a demand for Anglo to sell its businesses in South Africa – which is seen as a major hurdle to a deal.

The requirement has received a backlash from the government in Pretoria, which is Anglo’s second biggest shareholder.

Jamie Maddock, an energy analyst at wealth manager Quilter Cheviot, said the new offer ‘still falls some way short of reasonable expectations’.

‘It appears to overlook the superior quality and the unique characteristics of Anglo’s portfolio of assets,’ he said. ‘Additionally, there are significant questions about the level of political support and the intricate nature of the proposed transaction.’

Two weeks ago, Henry made an emergency visit to South Africa in an attempt to drum up support.

In demand: Australia's BHP, which quit London two years ago, is eyeing Anglo's coveted copper mines in Chile and Peru

In demand: Australia's BHP, which quit London two years ago, is eyeing Anglo's coveted copper mines in Chile and Peru

In demand: Australia’s BHP, which quit London two years ago, is eyeing Anglo’s coveted copper mines in Chile and Peru

It was reported last week that the trip had gone some way to resolving issues, with Anglo’s key South African shareholders now open to a takeover offer.

There has also been speculation that competitors Glencore and Rio Tinto could make bids.

A deal would see Anglo leave London’s stock market amid a ‘takeover frenzy’ in the City.

Australia’s BHP, which quit London two years ago, is eyeing Anglo’s coveted copper mines in Chile and Peru. There is soaring demand for the metal due to its role in the energy transition and the development of artificial intelligence.

Insiders have previously said that BHP would sell Anglo’s diamond arm De Beers, while the future of the Woodsmith mine in North Yorkshire is in doubt.

Anglo’s board received the proposal on May 7 before rejecting it yesterday. The decision also reflects feedback from shareholders and stakeholders.

Dan Coatsworth, investment analyst at AJ Bell, said BHP ‘needs to think on its feet’ after Anglo brought forward the investor update to today.

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