Anglo American has rejected rival BHP Group’s £31.1billion takeover proposal, which the London-listed miner said significantly undervalued the company and its future prospects.
BHP’s megadeal offer intended to create a mining behemoth, responsible for around 10 per cent of global copper production.
But analysts last night said BHP would have to improve its offer, which faced political opposition in South Africa and investors describing the bid as ‘opportunistic’ due to Anglo’s ‘depressed’ valuation.
Anglo chair Stuart Chambers described the deal as ‘opportunistic and fails to value Anglo American’s prospects’
And FTSE 100-listed Anglo on Friday shared those sentiments, concluding ‘that the Proposal significantly undervalues Anglo American and its future prospects’.
The deal would have forced Anglo to demerge both its platinum business and its Kumba Iron Ore unit, a proposal the group said is ‘highly unattractive’ for its shareholders ‘given the uncertain…complexity’ and ‘significant execution risks’ involved.
Anglo American shares were flat at around 2,559.5p on Friday morning, having been supercharged yesterday by the BHP bid.
BHP shares were down 1.1 per cent to 2,285p.
Anglo chair Stuart Chambers described the deal as ‘opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value upside participation of Anglo American’s shareholders relative to BHP’s shareholders’.
He added: ‘Anglo American is well positioned to create significant value from its portfolio of high quality assets that are well aligned with the energy transition and other major demand trends.
‘With copper representing 30 per cent of Anglo American’s 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’s shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materialises.
‘Anglo American has defined clear strategic priorities – of operational excellence, portfolio, and growth – to deliver full value potential and is entirely focused on that delivery.’
