BHP says Anglo American has rejected a revised $42.6 billion takeover offer

By Barbara Kollmeyer

BHP Group said Monday that Anglo American rejected a revised takeover offer that would value the British miner at $42.6 billion (GBP34 billion).

BHP (BHP) (UK:BHP) (AU:BHP) said it returned to Anglo American (UK:AAL) with an offer on May 7 that was 15% higher than its initial mid-April proposal, which was worth $39 billion and ultimately rebuffed.

Anglo American argued that the Australian firm's offer "significantly" undervalued the miner and its future prospects. BHP's plans involve spinning Anglo American Platinum and Kumba Iron Ore businesses out of the miner, then merging the rest of the company with BHP.

"BHP is disappointed that the Anglo American board has chosen not to engage with BHP with respect to the revised proposal and the improved terms. BHP continues to believe that a combination of the two businesses would deliver significant value for all shareholders," the company said in a statement on Monday.

U.S.-listed shares of BHP rose 0.8%, but the stock slipped 0.6% in London. Anglo American shares were unchanged.

MarketWatch has reached out to Anglo American for comment.

Earlier this month, Anglo American shares got a bump after a media report said Glencore (UK:GLEN) was considering making a rival offer to BHP's. Glencore shares slipped 0.2%.

"It is not a surprise to see Anglo American reject this bid from BHP; we thought it would need a bid of at least GBP29 per share to get the Anglo American board engaged," said a team of Berenberg analysts led by Richard Hatch. The new bid price is worth GBP27.53 per Anglo American share.

"The ball is in BHP's court until the 22 May put up or shut up deadline. We see scope for another revised bid from BHP, albeit not a major uplift, and we think it likely that another would-be bidder - such as Glencore - will emerge from the shadows. We continue to see some upside in Anglo American's share price on bid speculation, with downside risk to BHP's share price," Hatch and his colleagues added.

-Barbara Kollmeyer

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

05-13-24 1018ET

Copyright (c) 2024 Dow Jones & Company, Inc.