Anglo American Rejects BHP's GBP 31.1 Bln Buyout Proposal Citing Uncertainty And Complexity

(RTTNews) - Anglo American Plc. (AAUKY.PK, AAL.L) has rejected a 31.1 billion pounds takeover proposal from BHP (BHP.AX, BLT.L, BBL, BHP), citing that the proposal significantly undervalues Anglo American and its future prospects.

Anglo American noted that the proposal contemplates a structure which the Board believes is highly unattractive for Anglo American's shareholders, given the uncertainty and complexity inherent in the Proposal, and significant execution risks.

BHP said Thursday that on 16 April 2024 it made a proposal to the Board of Directors of Anglo American regarding a potential combination to be effected by way of a scheme of arrangement.

BHP's proposal comprises an all-share offer for Anglo American subject to the pro-rata distribution by Anglo American of its entire shareholdings in Anglo American Platinum Ltd and Kumba Iron Ore Ltd to Anglo American shareholders before completion.

As per the terms of the proposal, ordinary shareholders of Anglo American would receive 0.7097 BHP shares for each ordinary share in Anglo American; and ordinary shares in Anglo Platinum and Kumba, which would be distributed by Anglo American to its shareholders in direct proportion to each shareholder's effective interest in Anglo Platinum and Kumba.

The terms of the proposal would, based on closing market prices as at 23 April 2024, being the last trading day prior to press speculation, represent a total value of about 25.08 pounds per Anglo American ordinary share including 4.86 pounds in Anglo Platinum shares and 3.40 pounds in Kumba shares, valuing Anglo American's share capital at 31.1 billion pounds.

As per U.K. rule, BHP must, by not later than 5.00 p.m. on 22 May 2024, either announce a firm intention to make an offer for Anglo American or announce that it does not intend to make an offer. The deadline can be extended with the consent of the UK Panel on Takeovers and Mergers.