Anglo American has rejected a second takeover bid from BHP, calling the £34bn offer “very unattractive”.
The London-listed mining giant said its Australian rival’s latest proposal “continues to significantly undervalue” the company.
And Anglo bosses – who last month dismissed BHP’s first £31bn bid as “too low” and “highly opportunistic” – will today update investors on their plans for the business to prosper on its own.
The latest rejection prompted an angry response from BHP, the world’s largest miner, which said it was “disappointed” that Anglo had “decided not to engage” with the board on the new proposal.
Set the scene for what could be a testy meeting today when BHP boss Mike Henry and his Anglo counterpart Duncan Wanblad cross paths at a mining conference in Miami.
Clash: BHP boss Mike Henry, left, and his Anglo counterpart Duncan Wanblad, right, will cross paths at a mining conference in Miami.
The two are expected to hold conversations offstage.
Henry insisted yesterday that the new offer is beneficial for shareholders of both companies and said he was “disappointed” that Anglo rejected the offer.
The revised offer would increase Anglo shareholders’ ownership in the combined group to 16.6 percent from the 14.8 percent outlined in last month’s offer.
But the offer is still £6bn less than the £40bn that analysts have said would be needed to reach a deal.
And the new proposal maintains the demand that Anglo sell its businesses in South Africa, which is seen as a major obstacle to reaching a deal.
The requirement has received backlash from the Pretoria government, which is Anglo’s second largest shareholder.
Jamie Maddock, an energy analyst at wealth manager Quilter Cheviot, said the new offer “is still well below reasonable expectations.”
“It appears to overlook the superior quality and unique characteristics of Anglo’s asset portfolio,” he said. “In addition, there are significant questions about the level of political support and the intricate nature of the proposed transaction.”
Two weeks ago, Henry made an emergency visit to South Africa in an attempt to drum up support.
In demand: Australia’s BHP, which left London two years ago, is eyeing Anglo’s coveted copper mines in Chile and Peru.
Last week it was reported that the trip had gone some way to resolving issues, and that Anglo’s major South African shareholders were now open to a takeover bid.
There has also been speculation that competitors Glencore and Rio Tinto could bid.
A deal would see Anglo exit the London stock market amid an “acquisition frenzy” in the City.
Australia’s BHP, which left London two years ago, is eyeing Anglo’s coveted copper mines in Chile and Peru. Demand for the metal is increasing due to its role in the energy transition and the development of artificial intelligence.
Insiders have previously said BHP would sell Anglo’s diamond division, De Beers, while the future of the Woodsmith mine in North Yorkshire is in doubt.
Anglo’s board received the proposal on May 7 before rejecting it yesterday. The decision also reflects feedback from shareholders and stakeholders.
Dan Coatsworth, investment analyst at AJ Bell, said BHP “needs to think quickly” after Anglo brought forward the investor update to today.