BHP is “disappointed” that its second takeover offer for mining rival Anglo American has been rejected, but it cannot be surprised. The improved terms in the all-share proposal took the headline price from £31bn to £34bn but, since almost everybody agreed the original offer was several mineshafts short of full value, even a £3bn uplift wasn’t enough to put the defending board under serious pressure.
The problem here for BHP is twofold. First, the advertised offer price of £27.53 for Anglo (the day-to-day value obviously fluctuates with BHP’s share price) may look pretty against the pre-action level of £22-ish, but we’re talking about long-life assets here. Anglo stood at £36 in January last year and, if only it could fix its current production headaches, it’s not too hard to imagine it getting close to that level in reasonable time under its own steam. Some outside assistance in the form of a pickup in the price of platinum would help, for starters.
