Anglo American rejects second, higher BHP takeover offer

Anglo American rejects second, higher BHP takeover offer
Anglo American rejects second, higher BHP takeover offer

“The combined business would have a leading portfolio of high-quality assets in copper, potash, iron ore and metallurgical coal, and BHP would bring its track record of operational excellence to maximize returns from these high-quality assets.”

The revised offer was communicated to Anglo directors last week and proposed to exchange each Anglo share for 0.8132 BHP shares. That was an improvement on the 0.7097 BHP shares that each Anglo share would have converted to under the initial, non-binding offer in April.

At that exchange rate, close to $47 billion new BHP shares would be issued to Anglo investors if the deal were to proceed. The structure of the revised offer was similar to the first, in that BHP still did not want to take ownership of Anglo’s controlling stakes in two listed South African mining companies – the Kumba iron ore business and the Amplats platinum business.

Anglo American chief executive Duncan Wanblad is under pressure from his investors to outline the company’s strategy and arrest falling returns. Tertius Pickard

Anglo’s stakes in Kumba and Amplats would be distributed to Anglo investors before the BHP combination was finalized, and BHP offered to cover the “costs associated with completing the demergers and any other transaction-related costs”.

Anglo’s decision to reject BHP’s improved offer comes as Mr Henry prepares to share a stage with Anglo chief executive Duncan Wanblad at a major investor conference in Florida on Tuesday.

BHP’s initial bid was lashed by South African politicians, prompting Mr Henry to fly to South Africa for stakeholder meetings.

On Monday evening, he said a merger with Anglo would give BHP an index weighting of about 5 per cent on the Johannesburg Stock Exchange, while Kumba and Amplats would remain significant South African companies.

“South Africa will continue to benefit from Anglo Platinum and Kumba as major standalone South African mining companies, and they would be better placed to reinvest in South Africa,” he said in a statement.

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