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BHP Group Ltd requested an extension to the Wednesday deadline for its takeover offer for mining peer Anglo American PLC, but Anglo rejected this. Anglo denied the extension, saying BHP’s latest proposal remains confined in ‘scope, impact and duration’. Last week, the Melbourne-based miner’s third £34 billion takeover proposal was rejected by London-based Anglo American. BHP offered 0.8860 of a BHP share for each Anglo share. Shares in BHP were trading up 1.7% to 2,375.00 pence each in London on Wednesday morning, while Anglo American was down 0.7% to 2,539.00 each. BHP has a £120.11 billion market capitalisation, while Anglo’s is £34.03 billion. Anglo American turned down the offer saying it included the same ‘highly complex structure’ as those previously rejected on April 26 and May 13, as well as a risk to shareholder value. The all-share offer by BHP, also required Anglo American to move away from its operations in South Africa and complete two demergers of its shareholdings in Anglo American Platinum Ltd and Kumba Iron Ore Ltd. ‘The requirement to pursue two contemporaneous demergers of publicly listed companies alongside a takeover and the inter-conditional nature of the three transactions is unprecedented, and as a result of a takeover would result in additional material approvals and conditions, particularly in South Africa,’ Anglo American said. The deadline for BHP to address concerns and put forward a revised offer was subsequently extended to Wednesday. However, BHP believes an additional extension is now required to allow for further engagement on its proposal. Over the past week BHP has made an effort to address the concerns and proposed a range of socioeconomic measures to rectify value uncertainty issues relating to the proposed transition structure, it said. The company further indicated a willingness to discuss a reverse break fee, payable by BHP, should it fail to secure regulatory and anti-trust approvals. BHP’s offer still requires the distribution of Anglo American’s holdings in the two companies to shareholders prior to completion, but BHP outlined a plan to maintain Anglo American’s levels of employment in South Africa and to provide funding to support training and charitable commitments for a three year period. BHP intends on maintaining a listing on the Johannesburg Stock Exchange with a weighting of approximately 5%. The current deadline requires a firm offer by BHP for Anglo to be made by 5.00pm on Wednesday. Earlier this month, to fend off the BHP approach, Anglo unveiled a new ‘radical’ strategy that will see it keep copper and iron ore assets, while getting rid of platinum and diamond businesses. On Wednesday, Anglo argued: The BHP proposal is in clear contrast to Anglo American’s simpler standalone plan to accelerate value delivery.‘ It added: ’The complex structure proposed by BHP is likely to take more than 18 months to implement, throughout which there would be material risks to completion and uncertainty around the value delivered to Anglo American’s shareholders, regardless of whether regulatory approvals are ultimately received or not.‘ Copyright 2024 Alliance News Ltd. All Rights Reserved.
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