It asks to extend the deadline for BHP to present a final offer or withdraw from the operation by one week.
The British mining company Anglo American has rejected the new purchase proposal raised by the Anglo-Australian mining group BHP, the world's largest company in the sector, which values the company at around 38,600 million pounds (US$ 49,062 million), as confirmed to the London Stock Exchange.
"The board of Anglo American has unanimously rejected the latest proposal," the company announced in reference to the third proposal raised by BHP last Monday in which, for each Anglo American share, it offered 0.8860 own shares, in addition of shares in Anglo American Platinum Limited and Kumba Iron Ore Limited that would be distributed in direct proportion to the effective participation of Anglo American shareholders in these two subsidiaries.
As such, the terms of BHP's latest proposal represent a total value, based on share prices at market close on April 23, 2024, of approximately 29.34 pounds (US$37.29) per every Anglo American share.
In this sense, the Anglo American board considers that the latest proposal "includes the same highly complex structure as the proposals previously rejected on April 26, 2024 and May 13, 2024", as it contemplates the requirement that Anglo American complete two separate spin-offs of its stakes in Anglo American Platinum Limited and Kumba Iron Ore Limited.
As such, Anglo American's board continues to believe that there are serious concerns about the structure given that it is likely to result in a material risk of termination and have an impact on value that would fall disproportionately on the company's shareholders, in contrast with Anglo American's simplest standalone plan to accelerate the delivery of value to its shareholders and its proposal to spin off Anglo American Platinum Limited.
"The complex process proposed by BHP is likely to take 18 months or more to complete and carries significant execution and completion risks related to both value and time," adds the British company, which also anticipates the possibility that regulators impose conditions to authorize transactions that will disproportionately impact current Anglo American shareholders.
However, unlike what has been expressed on previous occasions, "to allow greater engagement with BHP in mitigating risks and impacting value on Anglo American shareholders", the company has requested, and the British authorities have consented , "an extension of the date" by which BHP must announce a firm intention to make a bid for Anglo American or withdraw from the deal.
Said announcement must now be made no later than 5:00 p.m. on May 29, 2024, thus extending the current deadline by one week.
In response, BHP has confirmed that it takes note of Anglo American's announcement of the deadline extension and notes that it submitted an improved final offer to Anglo American's board on Monday for a possible combination with Anglo American.
"Since the submission of the revised proposal, we have been collaborating with Anglo American and its advisors to help mitigate the concerns associated with the implementation of this structure that led to the rejection of the revised proposal," notes the Anglo-Australian company, highlighting the progress made on these issues, as well as their hope that a resolution will be reached in the next seven days.
"BHP's revised proposal will deliver immediate value to Anglo American shareholders and allow them to benefit from the long-term value creation of the combined group," said Mike Henry, CEO of BHP, who has expressed his willingness to collaborate with the Anglo American board of directors to explore the opportunity to merge the two businesses.
Likewise, BHP points out that it will not increase the offer, unless there is an announcement of an offer or possible offer on Anglo American by an external bidder or in the event that the board of directors of Anglo American announces that it recommends or intends to recommend an offer on better terms.
