Anglo-American rejects ‘opportunistic’ £31bn BHP bid
- FTSE 100 miner said rival’s approach undervalued the company
- The proposal aimed to build a mining giant responsible for 10% of the copper
Anglo American has rejected rival BHP Group’s £31.1 billion takeover proposal, saying it significantly undervalued the company and its future prospects, according to the London-listed miner.
BHP’s mega deal offer aimed to create a mining giant, responsible for about 10 percent of global copper production.
But analysts said last night that BHP would have to improve its bid, which faced political opposition in South Africa and investors describing the bid as “opportunistic” due to Anglo’s “depressed” valuation.
Anglo chairman Stuart Chambers described the deal as ‘opportunistic and fails to value Anglo American’s prospects’
And FTSE 100-listed Anglo shared these sentiments on Friday, concluding “that the proposal significantly undervalues Anglo American and its future prospects.”
The deal would have forced Anglo to spin off both its platinum business and its Kumba Iron Ore unit, a proposal the group says is “highly unattractive” to its shareholders “given the uncertain… complexity” and “significant execution risks that accompany it.
Anglo-American stocks were steady at around 2,559.5p on Friday morning, having been boosted by BHP’s bid yesterday.
BHP shares fell 1.1 percent to 2,285p.
Anglo chairman Stuart Chambers described the deal as “opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value of the upside holding of Anglo American shareholders versus BHP shareholders.”
He added: “Anglo American is well positioned to create significant value from its portfolio of high-quality assets that are well aligned with the energy transition and other key demand trends.
“With copper representing 30 percent of Anglo American’s total production, and with the benefit of well-sequenced and value-increasing growth opportunities in copper and other structurally attractive products, the Board believes that Anglo American shareholders will benefit from which we expect could deliver significant value appreciation as the full impact of these trends materializes.
“Anglo American has defined clear strategic priorities – from operational excellence, portfolio and growth – to realize its full value potential and is fully focused on that realization.”