Anglo American has rejected a second takeover approach by its Australian rival BHP that values the London-listed mining company at £34bn.
BHP said Anglo’s board had not engaged with its offer, which came after an initial £31bn offer was also rejected last month. Anglo rejected the second offer on Monday, BHP said.
A takeover of Anglo, a member of the FTSE 100, would create a global player in markets for commodities including copper, potash, iron ore and metallurgical coal used for steelmaking. It would be the biggest takeover ever in the mining sector, and a large deal at a time when mergers and acquisitions have slowed.
Copper in particular is in high demand as a crucial raw material in the low-carbon energy transition because it is essential in manufacturing components for renewable energy projects and electric vehicles. Anglo American’s key assets are copper mines in Peru and Chile.
Anglo American responded to BHP’s statement on Monday by saying that the latest offer “continues to significantly undervalue Anglo American and its future prospects” and that the board “unanimously rejected” the second proposal.
The offer will increase pressure on Anglo American’s boss, Duncan Wanblad, to reveal plans to improve Anglo American’s performance and persuade shareholders that the company would be better off staying independent. Anglo said it would provide a detailed investor update of its “standalone strategy” on Tuesday.
The new all-share offer is worth £27.53 for each Anglo American ordinary share, with BHP still proposing that Anglo sells its stakes in Anglo American Platinum and Kumba Iron Ore, returning cash to shareholders.
Anglo said the requirement from BHP to demerge the two businesses as part of a deal was “highly unattractive for Anglo American’s shareholders, given the uncertainty and complexity inherent, and significant execution risks”.
BHP said it was a 50% premium to the value of the Anglo American assets it wants before the approach became public. BHP’s original proposal was worth £25.08 a share. But since the deal came to light last month, Anglo’s shares had surged to about £28 on Monday morning. Shares in Anglo were down 0.5% at £27.58 after BHP announced that a second bid had been rejected.
In a statement to the London Stock Exchange, BHP said: “BHP is disappointed that the Anglo American board has chosen not to engage with BHP with respect to the revised proposal and the improved terms. BHP continues to believe that a combination of the two businesses would deliver significant value for all shareholders.”
BHP has until 22 May to make a firm offer or walk away under UK takeover rules.
Mike Henry, the BHP chief executive, 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.”
