In a decisive move, Anglo American’s Board has once again rejected BHP Group Ltd.’s takeover bid, citing the proposal’s failure to meet shareholder value expectations. The standoff reached a critical juncture as the deadline for the “put up or shut up” (PUSU) extension approached, with Anglo American refusing to grant further leeway.
The saga began on 22nd May, when Anglo American’s Board unanimously rejected BHP’s third unsolicited proposal. Despite the rejection, the Board had initially extended the PUSU deadline by seven days, allowing BHP until 5:00 p.m. on 29th May to address the inherent risks and value impacts of their proposal.
Extensive discussions ensued, focusing on the proposed structure’s execution and value risks. BHP’s offer, unchanged in complexity from previous rejections, required Anglo American to demerge its entire shareholdings in Anglo American Platinum and Kumba Iron Ore as a precondition to the all-share takeover, with each transaction interdependent on the others.
The Board highlighted the unprecedented nature of undertaking a takeover in tandem with two demergers, emphasising the additional regulatory approvals and material conditions likely to be imposed. These conditions could significantly devalue Anglo American Platinum and Kumba, adversely affecting shareholder returns.
On 28th May, BHP suggested a limited set of socioeconomic measures to facilitate regulatory approvals. However, the Board found these measures insufficient to mitigate the disproportionate execution and value risks that Anglo American’s shareholders would bear.