The board of mining firm Anglo American has unanimously rejected a US$39Bn takeover bid from Australia-based BHP
Anglo American said BHP’s offer “significantly undervalues” the company and its future prospects and was “highly unattractive” for Anglo American’s shareholders.
The proposal comprises an all-share offer for Anglo American by BHP and would be preceded by separate demergers by Anglo American of its entire shareholdings in Anglo American Platinum Ltd and Kumba Iron Ore Ltd to its shareholders. The two parts of the proposal would be inter-conditional.
BHP said on Thursday it had made an all-share takeover offer which valued the smaller company at £31.1Bn (US$38.9Bn).
Mining companies are among the most significant charterers in the dry bulk cargo segment. A potential merger, which would create the largest mining company in the world, might give the new entity more leverage in the dry bulk market.
Anglo American already owns a fleet of 10 newly delivered LNG dual-fuel Capesize vessels.
While BHP has announced that it plans to receive its first ammonia-fuelled bulk carrier in 2026.
In rejecting the BHP offer, Anglo American chairman Stuart Chambers termed it “opportunistic”, adding it failed to value the company’s prospects while significantly diluting the relative value upside participation of Anglo American’s shareholders relative to BHP’s shareholders.
Mr Chambers said the company is well positioned to create significant value from its assets, citing its copper portfolio in particular. Copper, which represents 30% of Anglo American’s production, will play a huge role in the energy transition in electric vehicles, power grids and wind turbines.
Mining firms are seeking to shore up copper supplies in the years ahead and some analysts speculate BHP’s bid a sign of the consolidation to come.
BHP has until 22 May to make a firm offer though the deadline can be extended.
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