Another knockback for Anglo takeover plans

The board of Anglo American has rejected a further $74 billion takeover proposal from BHP, with the deadline for a firm offer now extended to May 29. Anglo chairman Stuart Chambers said the board was confident in Anglo American’s standalone future prospects. It believed the company had set out a clear pathway and timeframe to deliver the acceleration of its strategy to unlock significant and undiluted value for Anglo American’s shareholders, Mr Chambers said. "The board considered BHP’s latest proposal carefully, concluded it does not meet expectations of value delivered to Anglo American’s shareholders, and has unanimously rejected it," he said. "In particular, it does not address the board’s concerns about the structure, which results in significant complexity, execution risks, an extended timeline to completion and consequently has the potential for material value leakage to be disproportionately suffered by Anglo American’s shareholders. "Multiple engagements with the BHP team have not yet been able to resolve the concerns on these issues. “However, the board is willing to continue to engage with BHP and its advisers on this topic and has therefore requested a one week extension to the PUSU deadline which has been consented to by the panel.” The most recent proposal involves an all-share offer for Anglo American by BHP, with a requirement for Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum and Kumba Iron Ore. For each Anglo American share owned, Anglo American’s shareholders would receive 0.8860 BHP shares in addition to ordinary shares in each of Anglo American Platinum and of Kumba Iron Ore. “BHP has put forward a final offer ratio of 0.8860 BHP shares for each Anglo American share," BHP chief executive officer Mike Henry said. "This is a significant increase from our first proposal and would provide Anglo American shareholders with 17.8 per cent of a combined BHP and Anglo American." He said BHP looked forward to engaging with the board of Anglo American 'to explore this unique and compelling opportunity to bring together two highly complementary, world-class businesses'. Anglo American last week revealed plans to shed its steelmaking coal mines as part of a wider strategy ‘to unlock value’. It owns the Moranbah North, Grosvenor, and Aquila underground mines, as well as the Capcoal and Dawson open-cut sites in the Bowen Basin. The ‘radically simplified portfolio’ at the centre of Anglo’s strategy comprises assets in copper, premium iron ore and crop nutrients. In addition to divesting its coal business, the company is exploring options for care and maintenance and divestment of its nickel assets. Anglo American Platinum is to be demerged, and diamond business De Beers is to be divested or demerged.

Another knockback for Anglo takeover plans

Industry Queensland

Related News

Industry reacts to renewed federal ministry

Finalists revealed for mining and METS sector awards

Elixir launches strategic plan for Taroom Trough growth

Get access to breaking mining news, now.