BHP, Anglo American rejects EUR 36 billion bid

Anglo American has rejected Bhp's £31.1 billion (EUR 36 billion) bid. The mining group's board, says a note, unanimously rejected an offer that 'significantly undervalues Anglo American and its future prospects' and whose structure is deemed 'decidedly unattractive' in light of the 'uncertainty and complexity surrounding the proposal and significant execution risks'.

BHP Group, the world's largest mining company - formed in 2001 by the merger of Australia's Broken Hill Proprietary Company and England's Billiton - had launched a £31 billion paper-for-paper (i.e. offering shares in the future group and not cash) takeover bid on Anglo American, which was worth £25.08 per Anglo American share, including £4.86 in Anglo Platinum shares and £3.40 in Kumba Iron Ore shares.

If the deal goes through in the future, it would become one of the largest deals since Glencore's deal with Xstrata over a decade ago. For its part, London-listed Anglo American had immediately pointed out that it had received an unexpected offer from its Australian rival.

'The board is currently reviewing this proposal with its advisors,' Anglo American had stated in a note earlier today, adding that 'there is no certainty that an offer will be made, nor on the terms in which such an offer might be made.

Specifically, Anglo American shareholders would have received 0.7097 Bhp shares for each ordinary share held and Anglo Platinum and Kumba ordinary shares, which would have been distributed proportionately by Anglo American to its shareholders. The terms of the proposal, based on closing market prices on 23 April 2024 (which is considered the last day of trading prior to the rumours launched by Bloomberg) represented a premium of 31% and a premium of approximately 78% over the weighted average closing price for the 90 trading days prior to 23 April.