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Anglo board responds to BHP bid, maintains 29 May deadline

29 May 2024

Anglo American's board has unanimously rejected BHP's third unsolicited takeover proposal, citing the same complex and unattractive structure as previous bids. The proposed deal would involve an all-share offer by BHP but asks Anglo to demerge its entire shareholdings in Amplats and Kumba Iron Ore before the takeover.

Anglo's board has rejected the BHP bid, citing the divestment effects on Amplats business.

The board used its latest statement to express concerns about the unprecedented nature of conducting two simultaneous demergers alongside a takeover, which would need additional material approvals and likely result in disproportionate value impacts on the already struggling Amplats business and Kumba.

Despite extensive engagement with BHP, the company has not adequately addressed the board's concerns regarding the execution risk associated with the proposed structure and the value that would ultimately be delivered to shareholders.

The merger would create a mining giant with a more extensive and diverse portfolio of assets, including copper, potash, iron ore, and metallurgical coal. This increased scale would give BHP greater market power and resilience against commodity price fluctuations.

Anglo rejects third BHP bid, but Australian miner remains confident

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The board also considered feedback from Anglo shareholders and stakeholders before unanimously concluding that there is no basis for a further extension to the "put up or shut up" (PUSU) deadline.

As a result, BHP must either announce a firm intention to make an offer or withdraw its bid by 5PM on 29 May 2024.

Anglo American's shareholders have been advised to take no action in relation to this matter.

BHP response

BHP proposed a limited set of socioeconomic measures aimed at addressing regulatory concerns regarding its takeover bid, however, Anglo's board maintains that these measures do not adequately address the significant execution and value risks that would disproportionately affect shareholders.

Despite BHP's reassurances, the company has consistently refused to modify its proposed complex structure to mitigate these risks. This stance stands in stark contrast to Anglo's simpler standalone plan for value acceleration.