The Board of Anglo American issued a statement in response to the revised $42.7 billion proposal from BHP Group Limited, confirming its rejection of the offer. On 7th May 2024, the Board received a second unsolicited proposal from BHP, which it termed as the “Latest Proposal”.
The Latest Proposal mirrors the structure of the previously rejected $39 billion offer from 26th April 2024. It entails an all-share offer from BHP for Anglo American, with the condition that Anglo American completes two separate demergers of its shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited to its shareholders. This offer and the required demergers are inter-conditional.
According to the Latest Proposal, Anglo American shareholders would receive 0.8132 BHP shares for each Anglo American share owned, along with ordinary shares in Anglo American Platinum Limited and Kumba Iron Ore Limited.
After careful consideration with its advisors, the Anglo American Board concluded that the Latest Proposal significantly undervalues the company and its future potential. Additionally, the Board highlighted concerns regarding the proposal’s complexity and uncertainty, especially regarding the simultaneous execution of two demergers.
Stuart Chambers, Chairman of Anglo American, commented: “The latest proposal from BHP again fails to recognise the value inherent in Anglo American. Anglo American shareholders are well positioned to benefit from increasing demand from future enabling products while the increasing capital intensity to bring greenfield supply online makes proven assets with world class resource endowments ever more attractive. The Anglo American team is focused on delivering against its strategic priorities of operational excellence, portfolio simplification and growth and is set to accelerate delivery in order to unlock this inherent value.
“The BHP proposal also continues to have a highly unattractive structure. This leaves Anglo American, its shareholders and stakeholders disproportionately at risk from the substantial uncertainty and execution risk created by the proposed inter-conditional execution of two demergers and a takeover.”