Anglo American (LON:AAL) rejected yesterday a revised takeover bid from mining giant BHP (ASX:BHP), saying the offer significantly undervalues the company.
The latest proposal values Anglo American at £$34 billion ($64.63 billion), up from around $60 billion.
Anglo American Chairman Stuart Chambers says BHP’s proposal fails to recognise the value in Anglo American and is an unattractive structure.
“This leaves Anglo American, its shareholders and stakeholders disproportionately at risk from the substantial uncertainty and execution risk created by the proposed inter-conditional executive of two demergers and a takeover,” he says.
Compared to the initial offer, the revised proposal represents a 14.6% increase in the merger exchange ratio and the BHP share consideration, and up to a 16.6% increase in Anglo American shareholder ownership in the combined group upon completion of the transaction.
BHP says it also represents a 14.2% increase in the undistributed value for Anglo’s unlisted assets, and an 11% increase in the spot value offered for its unlisted assets.
BHP CEO Mike Henry says the company is disappointed that the second proposal has been rejected.
“BHP and Anglo American are a strategic fit and the combination is a unique and compelling opportunity to unlock significant synergies by bringing together two highly complementary, world-class businesses,” he says.
“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 maximise returns from these high-quality assets.”
BHP’s initial offer of roughly $60 billion was put forward at the end of April. At the time, the price represented a 31% premium on the implied market value of Anglo’s unlisted assets, and a 78% premium to the volume-weighted average price of Anglo’s shares prior to 23 April 2024.
Anglo American is a global mining company focused on its mining operations and undeveloped resources that provide metals and minerals needed for a cleaner and more electrified world.
BHP is a resources company that operates in more than 90 locations worldwide. The company is focused on iron ore and metallurgical coal for steel needed for global infrastructure.
Write to Aaliyah Rogan at Mining.com.au
Images: Anglo American
