FX.co ★ Anglo American Rejects BHP's GBP 31.1 Bln Buyout Proposal Citing Uncertainty And Complexity

Anglo American Plc. has turned down a takeover bid of £31.1 billion from BHP. According to Anglo American, this proposal considerably shortchanges the company and does not align with its future potential.

The company pointed out that the structure of BHP's proposal offers little to no appeal for Anglo American's shareholders, due to the unidentified risks, inherent complexity, and high execution challenges involved.

BHP, last Thursday, stated that it had put forth a proposal to the Board of Directors of Anglo American on 16 April 2024. This proposed a potential merger that could be carried out through a scheme of arrangement.

Under BHP's proposal, an all-share offer would be made for Anglo American, subject to the full distribution of shares in Anglo American Platinum Ltd and Kumba Iron Ore Ltd to Anglo American shareholders prior to completion.

As per BHP’s terms, Anglo American ordinary shareholders would get 0.7097 BHP shares per their Anglo American ordinary share. Additionally, shares in Anglo Platinum and Kumba would be divided among Anglo American shareholders in correlation with each shareholder's interest in these companies.

Considering the market closing prices on 23 April 2024 (the last trading day before speculations began), the proposal would value each Anglo American ordinary share at roughly £25.08. This includes £4.86 in Anglo Platinum shares and £3.40 in Kumba shares, bringing the total value of Anglo American's share capital to £31.1 billion.

In line with U.K. regulations, by no later than 5:00 p.m. on 22 May 2024, BHP must either publicly declare its intent to offer for Anglo American or announce its decision not to make an offer, which can be extended with the permission of the UK Panel on Takeovers and Mergers.