Anglo American rejects BHP's latest proposal
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More news: Anglo American has knocked back BHP's request for an extension of a deadline on its bid for the company, and also rejected measures the Australian miner proposed to pacify South African regulators about the transaction.
"As stated in the announcement of 22 May 2024, the requirement to pursue two contemporaneous demergers of publicly listed companies alongside a takeover and the inter-conditional nature of the three transactions is unprecedented," Anglo American said in a statement before the London market open.
"On 28 May 2024, BHP put forward a limited number of socioeconomic measures that were confined in scope, impact and duration and that BHP stated would support regulatory approvals. This approach does not sufficiently address the fact that Anglo American’s shareholders would bear disproportionate execution and value risks and uncertainty over an extended period, nor does it consider that material conditions would likely be imposed in relation to both Anglo American Platinum and Kumba which would require the approvals of their respective boards. This value risk would therefore be exclusively for the account of Anglo American’s shareholders under the BHP Proposal, as well as eroding the value of the shares held by the minority shareholders of both subsidiary companies."
BHP asks for deadline extension on Anglo American bid
The news: BHP has requested an extension of the deadline on its bid for Anglo American, which was set to expire tonight, and also proposed a range of socio-economic initiatives in South Africa to secure regulatory support for the transaction.
The context: Ahead of its takeover proposal deadline (Thursday 2am AEST), BHP has asked for a deadline extension as it has proposed measures that it believes will provide “substantial risk protection for Anglo American shareholders” and supplement “the significant value uplift that Anglo American shareholders will receive from the potential combination”.
The measures include:
- BHP sharing in the costs of increased South African employee ownership of listed South African businesses;
- Establishing a mining centre of excellence to support research and development;
- Maintaining current employment levels at Anglo American’s Johannesburg office;
- Maintaining funding for Anglo American’s charitable commitments in South Africa at the current level;
- Support local South African procurement and engagement across mining industry sectors and regions;
- Ensuring continued access for South African investors through the listing of BHP on the Johannesburg Stock Exchange; and
- Maintaining Anglo American’s existing South African Reserve Bank and National Treasury undertakings, to the maximum extent practicable.
The proposed measures are expected to be maintained for at least three years.
Last week, Anglo American rejected BHP's third takeover proposal that valued Anglo at $74 billion. After rejecting the bid, Anglo requested an extension to the ‘put-up-or-shut-up’ (PUSU) takeover deadline for when BHP has to make an offer or walk away, by one week, until 29 May at 5pm (GMT).
What they said: In its announcement to the ASX BHP said its proposal would “provide greater economic benefits to South Africa than Anglo American’s Accelerating Value Delivery plan, mitigate perceived value and completion uncertainty and ensure that any costs are not borne disproportionately by Anglo American shareholders”.
The sources: ASX announcement, Anglo American release
