By Christian Moess Laursen

Anglo American rejected Australian mining giant BHP's plea to extend their $50 billion takeover talks, raising the possibility of a hostile bid.

BHP, the world's largest miner by market cap, on Wednesday outlined a range of measures aimed at addressing Anglo's concerns about the structure of the proposed deal.

"This approach doesn't sufficiently address the fact that Anglo American's shareholders would bear disproportionate execution and value risks and uncertainty over an extended period," Anglo said.

Last week, Anglo rebuffed BHP's latest bid--its third--as it deemed the deal too complex, echoing the reason behind the previous two dismissals. The offer valued Anglo at $49.87 billion.

BHP's offer proposes the spinoff of Anglo's South African units Anglo American Platinum and Kumba Iron Ore--a condition that Anglo said has significant execution risks.

Among the proposed measures outlined Wednesday, the two units would retain listings in Johannesburg and be run by South Africa-based management teams. Headcount at Anglo's Johannesburg office would be maintained.

BHP also committed to build a training facility in South Africa and promote the country as a mining destination, as well as support local procurement.

It said it was confident these measures--which would be maintained for at least three years--resolve Anglo's concerns, and would support South African regulatory approvals. The integration challenges are quantifiable and manageable, and the costs associated with them have already been factored into the offer, BHP said.

However, while the measures should ease concerns about some of the risks embedded in the deal structure, BHP didn't specify the cost associated with them, making it difficult to assess the value included in its offer, RBC Capital Markets analyst Marina Calero said in a note to clients.

"Anglo is unlikely to accept last week's offer unless the structure changes or a higher compensation is offered," Calero said.

The London-based miner reiterated Wednesday that it favored its prospects as a standalone company. Earlier this month, it accelerated a business overhaul to break itself up in order to fend off BHP.

BHP said Wednesday that it believes its proposed measures would provide greater economic benefits to South Africa than Anglo's planned restructure.

It added that it is open to discuss paying a termination fee if the deal fails to achieve necessary antitrust and regulatory approvals.

BHP has until 1700 London time to commit to a bid or walk away under U.K. takeover panel rules. Should it choose to go hostile, it wouldn't be a first for BHP, which in 2008 had a formal $174 billion bid rejected by Rio Tinto.

At 0942 GMT, BHP's London shares were up 1.9% at GBP23.80, while Anglo traded down 0.6% at GBP25.15, having been down 2% earlier in the session.

Write to Christian Moess Laursen at

(END) Dow Jones Newswires

05-29-24 0602ET