Anglo American rejects revised BHP offer
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The news: The Anglo American Board has rejected a revised takeover offer from BHP, which values the mining giant at around £34 billion ($64.44 billion).
The numbers: The revised bid valued Anglo American at £27.53 per share, an increase on the approximate £25 per share in the original proposal. The new offer represents a 15% increase in the previous merger ratio.
The context: According to a BHP press release, the new offer was submitted by BHP on 7 May and rejected on 13 May. BHP said it is disappointed that the Anglo American Board has chosen not to engage with BHP with respect to the revised proposal and the improved terms. Under the revised proposal, BHP has increased the number of BHP shares that would be received by Anglo American shareholders.
BHP first proposed the £31 billion takeover in late April, in a transaction that would have marked the sector’s second largest-ever deal. At the time, Anglo said the offer was opportunistic and significantly undervalued the company and its future prospects. Anglo American's board said the proposal had significant execution risks, uncertainty and complexity which made it highly unattractive for company shareholders.
What they said: Mike Henry, CEO, BHP said: “BHP put forward a revised proposal to the Anglo American Board that we strongly believe would be a win-win for BHP and Anglo American shareholders. We are disappointed that this second proposal has been rejected.
“BHP and Anglo American are a strategic fit and the combination is a unique and compelling opportunity to unlock significant synergies by bringing together two highly complementary, world class businesses. The combined business would have a leading portfolio of high-quality assets in copper, potash, iron ore and metallurgical coal and BHP would bring its track record of operational excellence to maximise returns from these high-quality assets.”
The sources: BHP press release, Financial Times
