BHP shares open lower after ending Anglo American pursuit
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More news: BHP shares opened lower after the mining heavyweight abandoned its $74 billion takeover pursuit of Anglo American on the brink of the ‘put-up-or-shut-up’ (PUSU) deadline.
Shares were down 1.3% to $44.48 by 10:34am AEST, while the wider materials sector was 0.37% lower.
BHP abandons $74b pursuit of Anglo American
The news: BHP has walked away from its takeover pursuit of Anglo American just hours before the negotiation deadline was due to expire.
The numbers: BHP’s third and final offer for Anglo American, which was made on 22 May, was set at approximately £29.34 ($56.19) per Anglo American share, valuing Anglo at about £38.6 billion ($73.92 billion).
The context: Early Wednesday morning UK time, BHP requested a second extension to the ‘put-up-or-shut-up’ (PUSU) takeover deadline which had been extended by one week to 29 May at 5pm (GMT). BHP argued that the extension would allow for further engagement on its proposals which include measures that it believed would provide “substantial risk protection for Anglo American shareholders” and supplement “the significant value uplift that Anglo American shareholders will receive from the potential combination.”
Anglo American knocked back BHP's request for an extension of the deadline on its bid for the company, and also rejected measures the Australian miner proposed to pacify South African regulators about the transaction.
In a statement published just one hour before the 5pm UK deadline, BHP confirmed that it had not reached an agreement to gain the support of Anglo’s board and will not be pursing the takeover further. In keeping with the UK’s PUSU rules, BHP must now walk away from the deal for at least six months.
What they said: In a statement on the deal collapse, BHP CEO Mike Henry said: "While we believed that our proposal for Anglo American was a compelling opportunity to effectively grow the pie of value for both sets of shareholders, we were unable to reach agreement with Anglo American on our specific views in respect of South African regulatory risk and cost and, despite seeking to engage constructively and numerous requests, we were not able to access from Anglo American key information required to formulate measures to address the excess risk they perceive."
“We remain of the view that our proposal was the most effective structure to deliver value for Anglo American shareholders, and we are confident that, working together with Anglo American, we could have obtained all required regulatory approvals, including in South Africa."
The sources: BHP statement, Anglo American statement
