BHP Takeover Proposal Rejected by Anglo American

Anglo American (LON: AAL) said Friday that it has rejected a takeover proposal put forward by BHP Group (NYSE: BHP). 

The rejection comes after the proposal was assessed by Anglo American's Board, which deemed it significantly undervalues the company and its future prospects. In addition, they see it as unfavorable for shareholders.

The proposal, described as unsolicited, non-binding, and highly conditional, outlined an all-share offer from BHP for Anglo American. It required Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited to its shareholders. The inter-conditional nature of the offer and the complexity of the proposed structure were cited as key reasons for rejection.

Stuart Chambers, Chairman of Anglo American, emphasised the company's strong position in creating value from its high-quality asset portfolio, particularly noting its alignment with energy transition and major demand trends. Chambers highlighted Anglo American's strategic priorities, including operational excellence, portfolio management, and growth initiatives, which the board believes will lead to significant value appreciation for shareholders.

Chambers characterised BHP's proposal as opportunistic and failing to recognise Anglo American's true value and prospects. He expressed concerns about the proposed structure, which would disproportionately dilute the value upside participation of Anglo American's shareholders relative to BHP's shareholders while also introducing substantial uncertainty and execution risk.

There is no certainty that BHP will make a firm offer. However, it has until May 22 to do so. 

Anglo American shares jumped more than 16% on Thursday following news of the proposal.