By Christian Moess Laursen


Anglo American rebuffed an improved 39.24 billion-pound ($49.87 billion) takeover proposal from rival BHP Group, following two prior rejections over the past month, in what would have been the largest-ever mining deal.

Despite the rejection, Anglo's board said it is willing to engage with BHP and has therefore requested a one-week extension to the formal offer deadline. BHP--the largest miner in the world by market cap--now has until May 29 to state whether it will make a new bid.

London-based diversified miner Anglo American said Wednesday that under the proposed bid, it would have received 0.886 BHP shares for each Anglo share held, with the proposal valuing the company at GBP29.34 a share based on share prices before BHP's initial proposal became public last month.

Anglo American has already rejected two all-share offers from BHP, citing significant undervaluation of the company and the proposals being too complex to execute. This third bid included the same highly complex structure as the two previous proposals, Anglo said.

The previous proposal, made public on May 13, would have given shareholders 0.8132 BHP shares for each Anglo share held, and 16.6% of the combined company.

So far, all bids have included the contingent spinoffs of Anglo American Platinum and Kumba Iron Ore, as BHP wanted to avoid owning these South Africa-based units that have been hamstrung by tumbling commodity prices, persistently high costs and continued logistical strains over the past year--a condition that Anglo deemed too complex.

"[The bid] doesn't address the board's concerns about the structure," Chairman Stuart Chambers said.

Anglo said the execution of the demergers proposed by BHP would likely take 18 months or more to complete and carry significant risks relating to both value and time.

To fend off BHP, Anglo last week outlined accelerated plans to restructure its operations in an attempt to convince shareholders of the prospects of a standalone business. The plans will leave Anglo with its copper and iron-ore operations as well as its crop-nutrients project Woodsmith, while breaking off platinum-metals, diamond, steelmaking coal and nickel operations.

"The board is confident in Anglo American's standalone future prospects and believes that Anglo American has set out a clear pathway and timeframe to deliver the acceleration of its strategy," Chambers said.

A tie-up between BHP and Anglo American, which would create the largest copper producer in the world, illustrates the growing importance of the metal essential to clean-energy products, a sector that has long relied on Chinese industrialization to boost profits.

Copper represents some 30% of Anglo American's output, with its Los Bronces mine in Chile accounting for around 2% of the world's known resources, while BHP counts a majority stake in Chile's Escondida, the world's biggest copper mine, among its assets. BHP bought Australian copper-and-gold miner Oz Minerals for $6.34 billion in May last year, representing its biggest acquisition since 2011.

Copper prices are up some 26% so far this year, reflecting expectations that demand for the metal will rise as the world decarbonizes and supply will be constrained. Electric vehicles and wind farms use copper in much greater quantities than gasoline-powered cars and coal-fired power stations.

In a separate release, BHP said this would be its final offer, but reserved the right to improve the proposal if other bidders emerge or if Anglo's board recommends an offer.


Write to Christian Moess Laursen at christian.moess@wsj.com


(END) Dow Jones Newswires

05-22-24 1033ET