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Anglo American has rejected BHP’s offer to break up and buy the UK-listed miner, saying the proposal “significantly undervalues” the company and its future prospects and that the deal would be “highly unattractive” to its shareholders.
BHP approached its smaller rival this month over an all-stock offer that was conditional on the spin-off of Anglo American’s platinum and iron ore businesses in South Africa.
BHP’s shares fell nearly 5 per cent on Friday as investors flagged their concern that the world’s biggest miner might have to pay more to seal its offer. The drop in BHP’s share price means the deal value is now lower than the initial £31bn quoted in the BHP proposal based on the undisturbed share prices.
“The BHP proposal is opportunistic and fails to value Anglo American’s prospects,” said Stuart Chambers, chair of Anglo American. “The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders.”
The Australian miner’s all-stock offer for its smaller rival is intended to boost its position as one of the world’s biggest copper and steelmaking coal suppliers.
BHP has said it wants a prior spin-off of Anglo’s South African iron ore and platinum divisions, which are independently listed, and will review Anglo’s other assets once the deal is completed.
This is a developing story