BHP has abandoned its bid for London-listed miner Anglo American as the City continues to battle foreign predators.
Less than an hour before the 5:00 p.m. deadline expired yesterday, the Australian group stated that it had not obtained the support to make a firm offer for Anglo, one of the largest companies on the London Stock Exchange.
The announcement ends a five-week battle and means BHP must wait at least six months before making another push.
“While we believed our proposal was a compelling opportunity to effectively increase value for both sets of shareholders, we were unable to reach an agreement,” said BHP chief executive Mike Henry.
This comes after Anglo bosses refused to extend yesterday’s 5pm deadline, which coincided with South Africa’s elections.
No deal: BHP revealed it had been unable to secure backing to make a firm bid for Anglo American
South African politicians, particularly Mining Minister Gwede Mantashe, opposed the deal, adding a layer of political complexity. But Anglo’s board said yesterday it had maintained “extensive engagement” with shareholders before concluding there was “no basis for a further extension”.
Last week, Anglo rejected BHP’s third offer of £39bn but agreed to enter into takeover talks after two previous offers from its larger rival of £31bn and £34bn.
This comes on top of companies lobbying against takeovers, with Currys and Direct Line fending off predators this year.
A major hurdle had been the requirement for Anglo to sell two of its South African businesses, as BHP bosses had their sights set on the company’s lucrative copper business.
But the no-deal announcement will boost the beleaguered London market, which has seen gambling firm Flutter and travel group Tui quit.
However, the company may not be out of the woods yet.
Dan Coatsworth, investment analyst at AJ Bell, said: “BHP has given the starting signal for others to throw their hat in the ring and it seems almost certain that another player could bid for Anglo American in the near future.”
RBC Europe analyst Marina Calero said Glencore, Rio Tinto and Vale were the “most likely candidates.”
BHP’s decision puts pressure on Anglo chief executive Duncan Wanblad to show he can increase shareholder value.
Shares have risen a fifth since acquisition talks began.
Wood Group could fall into foreign hands after Dubai firm Sidara sweetened its offer, valuing the Aberdeen firm at 230p, or £1.59bn.
Wood said he was “evaluating” a “fourth and final” proposal.
The shares fell 2.5 per cent, or 4.7p, to 185.6p.