Anglo American rejects BHP’s unattractive, opportunistic $39bn takeover bid

Anglo American's management has rejected BHP Group's $39 billion takeover bid as unattractive, citing complexities in the proposed demerger of its South African assets. Despite BHP's 31% premium offer, analysts doubt its sufficiency, suggesting potential interest from other mining giants like Rio Tinto and Glencore. As Anglo explores alternatives, including seeking partners for its De Beers diamond business, the industry anticipates potential counteroffers before BHP's May 22 deadline..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..SOURCE: REUTERS.By Clara Denina, Amy-Jo Crowley and Anousha Sakoui.LONDON, April 25 (Reuters) – Anglo American's management does not consider a proposed $39 billion takeover offer from BHP Group as attractive, two sources told Reuters, as some investors and analysts dismissed it as opportunistic. .___STEADY_PAYWALL___.BHP on Thursday offered Anglo's shareholders 25.08 pounds ($31.39) per share, or $38.8 billion, a premium of 31% to the market close on Wednesday. It would take over Anglo after a spin-off of two assets..Speaking on condition of anonymity because the matter is private, one of the sources said the offer did not address the complexities of demerging the Anglo American Platinum and Kumba Iron Ore businesses in South Africa..BHP has until May 22 to come back with a binding bid..Anglo, which has a market value of $36.7 billion, said it would be reviewing the offer, without elaborating..The proposed tie-up would create a group with around one tenth of the global output of copper, which is in demand for its use in electric vehicles and new technologies, such as automation and artificial intelligence..BHP has made the offer as Anglo continues a strategic review of its assets started in February in response to a 94% fall in annual profit and a series of writedowns caused by to lower commodity demand..Read more: Anglo American Platinum announces 15% job cuts amidst economic pressures.One of the sources said Anglo's management was continuing "full steam ahead" with the review..The company has also been looked for other ways to strengthen its position..Two sources close to the matter said Anglo American in March picked investment bank RBC Capital Markets to begin a syndication process for its costly Woodsmith fertiliser project in northeast England, accelerating the search for an investor to share the $9 billion capital cost..RBC was not immediately available to comment..Another source said Anglo American was looking for partners for its diamonds De Beers business, which is among the assets BHP has said it would review after completion of any deal..Analysts, meanwhile, also said the offer was probably not enough and that Anglo American's assets could be a better fit for othe major mining companies.."This (BHP's) offer isn't enough to get either the board or the shareholders over the line," Liberum analyst Ben Davis said..Analysts at Deutsche Bank said the "strategic rationale" of a merger could be as strong for Rio Tinto and Glencore.."The proposed offer by BHP could potentially spur alternative bidders to enter the frame," they said..Rio Tinto and Glencore both declined to comment on any possible interest and BHP declined to give any additional details beyond its offer..Nichola Stein, portfolio manager at Coronation Fund Managers, which holds Anglo American shares, was also dismissive.."The offer price appears quite opportunistic, especially when they say: get rid of the stuff we don't want before it …even goes through, making it conditional on that," Stein said..Read also:.Anglo American CEO defends leadership amid commodity price slump and operational challenges🔒 Anglo American mulls job cuts in South Africa amid metal price declines and export bottlenecksBHP launches takeover bid for rival miner Anglo American, spotlight on copper.(Reporting by Clara Denina, Pratima Desai, Amy-Jo Crowley, Anousha Sakoui; additional reporting by Felix Njini. Editing by Veronica Brown and Barbara Lewis)

Anglo American rejects BHP’s unattractive, opportunistic $39bn takeover bid

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