The Board of Anglo American has unanimously rejected a revised takeover proposal from BHP Group Limited, which was received on 7 May 2024.
The latest offer, similar to a previous proposal rejected on 26 April 2024, involves an all-share bid for Anglo American, contingent on the demerger of its shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited.
Under the terms of the latest proposal, Anglo American shareholders would receive 0.8132 BHP shares per Anglo American share, along with proportional shares in Anglo American Platinum Limited and Kumba Iron Ore Limited.
The Board, after consultation with advisers, concluded that the proposal significantly undervalues Anglo American and introduces substantial uncertainty and execution risk.
Stuart Chambers, Chairman of Anglo American, commented: “The latest proposal from BHP again fails to recognise the value inherent in Anglo American.
“Anglo American shareholders are well positioned to benefit from increasing demand from future enabling products while the increasing capital intensity to bring greenfield supply online makes proven assets with world-class resource endowments ever more attractive.
The Board highlighted that the required contemporaneous demergers would create significant uncertainty and complexity, with the shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited valued at approximately $15 billion, representing 34 per cent of the proposed total consideration.
This adds to the complexity and potential conditions required for regulatory approvals, which could adversely affect Anglo American shareholders.
Emanuel Datt, Chief Investment Officer at Datt Capital, commented: “BHP has put forward what we consider to be a fair and reasonable offer to Anglo American shareholders, at a significant premium to the undisturbed value.
“The deal structure proposed is also appropriate and provides ongoing potential upside for Anglo American shareholders via the demerged assets whilst enjoying the exposure to a very high-quality asset base in BHP shares.
The Board of Anglo American advises shareholders to take no action regarding the proposal.
BHP must announce its firm intention to make an offer by 5:00 p.m. on 22 May 2024, as stipulated by the Takeover Code, unless an extension is granted by the Takeover Panel.
Anglo American plans to provide a detailed investor update on 14 May 2024, emphasising its confidence in the company’s standalone future and its accelerated strategic plans for operational excellence, portfolio simplification, and growth.
