Anglo American has rejected a second acquisition from Australian mining company, BHP, noting that the structure of the latest proposal is unchanged from the one previously rejected last month.
In update on Monday, Anglo confirmed receiving a second unsolicited, non-binding and highly conditional combination proposal from BHP on the 7th May.
However, the mining conglomerate said its board has considered the latest proposal with its advisers and concluded that it continues to significantly undervalue Anglo American and its future prospects.
In addition, the group says the baord has also taken into account the detailed feedback from its extensive engagement with its shareholders and stakeholders since the approach from BHP became public on 24 April 2024.
“Aside from significantly undervaluing Anglo American, the latest proposal continues to contemplate a structure which the Board believes is highly unattractive for Anglo American’s shareholders, given the uncertainty and complexity inherent, and significant execution risks,” Anglo said in a statement.
“The requirement to pursue two contemporaneous demergers creates significant uncertainty, which falls disproportionately to Anglo American shareholders.”
The structure proposed by BHP comprises an all-share offer for Anglo American, with a requirement for Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American shareholders.
Under the proposal, the all-share offer and required demergers would be inter-conditional.
Anglo said the requirement to pursue two contemporaneous demergers creates significant uncertainty, which falls disproportionately to Anglo American shareholders.
According to the group, the Anglo American Platinum Limited and Kumba Iron Ore Limited shareholdings, at current market value, are worth approximately $15bn and 34 percent of the proposed total consideration.
“This is a substantial amount of stock to distribute and reflects a majority of the shares of both Anglo American Platinum Limited and Kumba Iron Ore Limited,” Anglo said.
“This creates significant uncertainty as to the delivered value as part of the proposal. In addition, by requiring this as part of a takeover of Anglo American, it would result in additional approvals related to these two demergers.”
