According to the board of Anglo American, the takeover bid significantly undervalues the company and its future prospects
BHP’s £31.1bn takeover bid rejected by Anglo American. (Credit: Anglo American)
UK-based mining company Anglo American has rejected rival Australian miner BHP Group’s £31.1bn “unsolicited and non-binding” buyout offer.
According to the board of Anglo American, the takeover bid significantly undervalues the company and its future prospects.
The company’s board also stated that the offer proposes a structure that is highly unattractive for Anglo American’s shareholders.
Besides, BHP’s bid is said to be associated with uncertainty and complexity along with substantial execution risks.
Anglo American’s board has also asked its shareholders to refrain from taking any action regarding the offer.
Anglo American chairman Stuart Chambers said: “The BHP proposal is opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value upside participation of Anglo American’s shareholders relative to BHP’s shareholders.
“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.
“Anglo American has defined clear strategic priorities – of operational excellence, portfolio, and growth – to deliver full value potential and is entirely focused on that delivery.”
Chambers also stated that Anglo American is strategically positioned to capitalise on its portfolio of premium assets, which are closely aligned with the evolving energy landscape and other prominent demand shifts.
He further said that with copper comprising 30% of Anglo American’s overall production and bolstered by thoughtfully planned growth opportunities across copper and other appealing product lines, the board is confident that shareholders will reap substantial benefits from the anticipated value appreciation as these trends unfold.
Announced last week, BHP’s bid was conditional upon the pro-rata distribution by Anglo American of its entire interests in Anglo American Platinum and Kumba Iron Ore to its shareholders.
Under the proposed deal, shareholders of Anglo American were expected to receive 0.7097 shares of BHP for each ordinary share in Anglo American and ordinary shares in Anglo American Platinum and Kumba Iron Ore.
Through the merger, BHP aims to develop an entity with a portfolio of large, low-cost, long-life Tier 1 assets focused on iron ore and metallurgical coal, with additional strategic interests in commodities like potash and copper.