{"id":4127,"date":"2024-04-29T15:02:53","date_gmt":"2024-04-29T13:02:53","guid":{"rendered":"https:\/\/a2kadvisory.com\/?p=4127"},"modified":"2024-04-29T15:26:56","modified_gmt":"2024-04-29T13:26:56","slug":"anglo-american-rejects-opportunistic-39bn-takeover-bid-from-bhp","status":"publish","type":"post","link":"https:\/\/a2kadvisory.com\/fr\/2024\/04\/29\/anglo-american-rejects-opportunistic-39bn-takeover-bid-from-bhp\/","title":{"rendered":"Anglo American rejects \u201copportunistic\u201d $39bn takeover bid from BHP"},"content":{"rendered":"
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Near the tailings dam at Los Bronces copper mine in Chile. (Image courtesy of\u00a0Anglo American | Flickr.<\/a><\/em>)<\/p><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Anglo American (LON: AAL)\u00a0has rejected<\/a>\u00a0a\u00a0$39 billion takeover offer<\/a>\u00a0from BHP (ASX: BHP) conditional to the target company divesting its platinum and iron ore businesses in South Africa.<\/p>

\"\"BHP\u2019s unsolicited offer \u201csignificantly undervalued\u201d the 107-year-old mining company and would be \u201chighly unattractive\u201d to its shareholders, Anglo said on Friday in a response widely expected by analysts.\u00a0<\/div>

\u201cThe BHP proposal is opportunistic and fails to value Anglo American\u2019s prospects,\u201d Anglo chairman Stuart Chambers said in the statement.<\/p>

The bid contemplated a structure which the board believes is \u201chighly unattractive for Anglo American\u2019s shareholders, given the uncertainty and complexity inherent in the proposal, and significant execution risks.\u201d<\/p>

Analysts and some of Anglo\u2019s top investors agreed on Thursday that BHP\u2019s initial offer was significantly lower than the kind of price that would compel the miner to consider the proposal. If BHP wants to initiate negotiations, it will need a sweeter offer.<\/p>

BHP\u2019s proposal is valued at \u00a325.08 per Anglo share, a 14% premium to the target company\u2019s closing price on Wednesday.\u00a0For Jefferies\u2019 Christopher LaFemina, a price of at least \u00a328 per share would be necessary for serious discussions to take place.<\/p>

\u201cIf we include our estimate of synergies on an after-tax present value basis, we estimate Anglo fair value to be 2824p per share, which equates to a $42.6 billion equity value. That is 28% above the most recent Anglo share price, and we believe it is a reasonable starting point,\u201d LaFemina wrote.<\/p>

\u201cAnglo American shareholders may consider fair value closer to the share price in 2023 before operational issues emerged and other suitors may be compelled to act at this price,\u201d said James Whiteside, metals and mining research director at Wood Mackenzie.<\/p>

BMO analyst Alexander Pierce believes there is room for an improved offer adding that it would be up\u00a0to management to show how the merger can drive value. \u201cThe combined entity would have EBITDA of about $33 billion and would easily be the largest mining company globally, including the world\u2019s largest copper producer at nearly 2Mtpa attributable, which could bring some regulatory scrutiny,\u201d Pierce wrote. \u201cHowever, copper exposure would reduce overall for Anglo American shareholders, while iron ore would increase.\u201d<\/p><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Elliot\u2019s $1 billion play<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Amid the buzz triggered by the potential tie-up, news of Elliott Investment Management silently building a nearly $1 billion stake in Anglo American, has come to light. The move, reported first\u00a0by Bloomberg<\/a>, adds to the challenges Anglo American faces following its refusal of BHP\u2019s approach.<\/p>

The activist hedge fund, headed by Paul Singer, has been acquiring shares over the past few months, according to sources familiar with the matter quoted by Bloomberg.\u00a0<\/p>

The size of the stake would place Elliott as one of the miner\u2019s top 10 shareholders.<\/p>

The activist investor is not a stranger to mining. In 2017, it\u00a0acquired a large stake<\/a>\u00a0in BHP and\u00a0pressured the company to divest certain oil assets<\/a>. By 2021, the world\u2019s largest miner had made agreements to further\u00a0reduce its involvement in fossil fuels<\/a>, such as\u00a0selling its oil and gas<\/a>\u00a0operations to\u00a0Woodside Petroleum Ltd<\/a>.<\/p>

Both Elliott and Anglo American declined to provide comments on the matter.<\/p><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Copper thirsty<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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A merger would give BHP about 10% of global copper production. It would also boost its presence in the world\u2019s top copper producing countries, Chile and Peru, as it would gain access to four of the world\u2019s largest copper mines \u2014 Collahuasi (with ownership of 44%), Los Bronces (50.1%), El Soldado (50.1%) and Quellaveco (60%). This would improve the company\u2019s exposure to the metal, a key actor in the world\u2019s ongoing energy transition, by about 40%.\u00a0<\/p>

\u201cWith copper representing 30% of Anglo American\u2019s total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products, the board believes that Anglo American\u2019s shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materializes,\u201d Anglo chairman Chambers said.<\/p>

Anglo has been a\u00a0takeover target<\/a>\u00a0in recent years after output fell and costs mounted. Potential suitors have been discouraged along the way by Anglo\u2019s complex business structure and mix of commodities, including platinum and diamonds.<\/p>

Under takeover rules, BHP is required to either make a solid offer for Anglo American by May 22 or walk away.<\/p>

The potential agreement is already being compared to BHP merger with South Africa\u2019s Billiton in 2001. Another BHP mega-merger attempt was its 2007 bid to acquire rival Rio Tinto, which was rebuffed.<\/p><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Source : mining.com<\/a><\/p><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"

Anglo American (LON: AAL) has rejected a $39 billion takeover offer from BHP (ASX: BHP) conditional to the target company divesting its platinum and iron ore businesses in South Africa.<\/p>","protected":false},"author":1,"featured_media":4129,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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Anglo American rejects \u201copportunistic\u201d $39bn takeover bid from BHP<\/a><\/blockquote>