Anglo American (JO:AGLJ) has turned down a substantial 31.1 billion pound ($39 billion) takeover offer from BHP Group (LON:BHPB), citing the proposal’s failure to adequately value the London-listed mining company and its future growth prospects.
Bid seen as “opportunistic”
Anglo American’s rejection on Friday came with strong remarks from Chairman Stuart Chambers, who described the offer as “opportunistic” and not reflective of the company’s true value.
According to Chambers, the proposal would significantly dilute the value upside for Anglo’s shareholders compared to those of BHP.
Shareholder considerations and market reactions
Under the terms of the proposal, Anglo American would need to distribute its stakes in Anglo American Platinum and Kumba Iron Ore to its shareholders, both key assets located in South Africa.
BHP currently holds no assets in the region, adding a layer of complexity and risk to the deal.
Following the news, Anglo’s shares dropped by 0.6% in early trading, while BHP’s shares fell by 4.6% in Australia, reflecting the market’s shaky confidence in the proposed deal.
Future implications for both companies
The rejection sets the stage for potential further negotiations or could prompt BHP to reconsider its approach.
The outcome of this high-profile corporate interaction could significantly influence the operational and financial strategies of both mining giants in the competitive global resources market.