Anglo American rejects further BHP takeover proposal

On 20 May 2024, the Board of Anglo American (the “Board”) received a third unsolicited, non-binding and highly conditional takeover proposal from BHP Group Limited (“BHP”) (the “Latest Proposal”).

Under the terms of the Latest Proposal, for each Anglo American share owned, Anglo American’s shareholders would receive:

  • 0.8860 BHP shares; and
  • Ordinary shares in each of Anglo American Platinum Limited and of Kumba Iron Ore Limited (distributed by Anglo American to its shareholders in direct proportion to Anglo American’s shareholders’ effective interest in Anglo American Platinum Limited and Kumba Iron Ore Limited).

The terms of the Latest Proposal represent a total value, based on undisturbed share prices as at market close on 23 April 2024, of approximately £29.34 per Anglo American share. On the basis of the 30-day and 90-day volume weighted average share prices up to and including 23 April 2024, the terms of the Latest Proposal would value Anglo American at £29.91 and £29.67 per Anglo American share, respectively.

The Latest Proposal includes the same highly complex structure as the proposals previously rejected on 26 April 2024 and 13 May 2024. This involves an all-share offer for Anglo American by BHP, with a requirement for Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American’s shareholders. The all-share offer and required demergers would be inter-conditional.

The Board and its advisers have engaged with BHP and its advisers on multiple occasions with a particular focus on the proposed structure and associated risks. The Board continues to believe that there are serious concerns with the structure given that it is likely to result in material completion risk and value impact that disproportionately falls on Anglo American’s shareholders. 

The requirement to pursue two contemporaneous demergers of publicly listed companies alongside a takeover and the inter-conditional nature of the three transactions is unprecedented, and as a result of a takeover would result in additional material approvals and conditions, particularly in South Africa. BHP’s Latest Proposal is therefore in clear contrast to Anglo American’s simpler standalone plan to accelerate value delivery announced on 14 May 2024 and its proposal to demerge Anglo American Platinum Limited – a single demerger that Anglo American has a proven track record in delivering.

The complex process proposed by BHP is likely to take 18 months or more to complete and carries significant execution and completion risks relating to both value and time. The key elements of Anglo American’s standalone plan to accelerate value delivery are expected to be substantively complete by that stage. The approvals required in relation to BHP’s Latest Proposal will also likely result in conditions being imposed that disproportionately impact Anglo American Platinum Limited and Kumba Iron Ore Limited and, therefore, Anglo American’s shareholders.

In addition, the Board has also considered detailed feedback from its extensive engagement with Anglo American’s shareholders and stakeholders since the release of Anglo American’s accelerated plans for delivery of its standalone strategy on 14 May 2024, continuing its engagement with its shareholders since the approach from BHP became public on 24 April 2024.

The Board is confident in Anglo American’s standalone future prospects and believes that Anglo American has set out a clear pathway to deliver the acceleration of its strategy detailed on 14 May 2024, that is expected to unlock significant and undiluted value for Anglo American’s shareholders.

Taking the above considerations into account, the Board of Anglo American has unanimously rejected the Latest Proposal.

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