BHP Says Anglo American Rejects Fresh $42 Billion-Plus Takeover Bid
Bid by Australian mining company shows eagerness to boost exposure to copper
BHP said smaller rival Anglo American AAL -0.85%decrease; red down pointing triangle rejected a sweetened takeover proposal that valued the mining company at more than $42 billion, in what would be the biggest mining deal on record.
The move from the Australian mining giant shows an eagerness to boost exposure to copper at a time when demand for the metal is expected to rise as the world decarbonizes and supply tightens. Copper represents some 30% of Anglo American’s output, while BHP counts a majority stake in Chile’s Escondida, the world’s biggest copper mine, among its assets.
BHP said it made a revised proposal to Anglo’s board on May 7, which rejected it on Monday.
A spokesperson for Anglo declined to comment. Anglo rejected BHP’s earlier offer last month, saying the proposal was too complex and undervalued the company.
BHP said its new, all-share proposal valued Anglo at approximately 34 billion pounds, about $42.59 billion, up from its earlier bid of £31.1 billion.
Under the new proposal, BHP said Anglo shareholders would have gotten 0.8132 BHP shares for each ordinary share they own in Anglo. The proposal, like BHP’s earlier bid, is contingent on Anglo spinning off shareholdings in two South African-listed units.
BHP said it was disappointed Anglo had chosen not to engage with it on the new proposal, saying it “continues to believe that a combination of the two businesses would deliver significant value for all shareholders.”
The world’s miners are gathering this week for a conference in Miami, where the chief executives of Anglo and BHP are both expected to make presentations on Tuesday. The latest demurral is likely to increase pressure on Anglo to soon unveil its own plan to satisfy shareholders, who have been pressing for clarity about the direction of the company.
Anglo American has been cutting costs and reviewing its assets in recent months as its share price has fallen. It has held early conversations with potential buyers for its storied De Beers diamond unit, which it values at more than $7 billion, The Wall Street Journal has reported.
The rejected bid also opens the door for other miners to swoop in, with analysts and investors expecting several other industry players to at least consider their own offers.