Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
BHP chief executive Mike Henry met with government officials in South Africa last week, fuelling speculation that the Australian miner will resurrect its failed £39bn bid for Johannesburg-based rival Anglo American.
Henry and chief development officer Catherine Raw last week met with South Africa government officials and the Public Investment Corporation, the state-owned asset manager, according to three people with knowledge of the details.
Raw, who joined BHP in April, is in charge of mergers and acquisitions and was involved in the first Anglo approach. PIC is the second-largest shareholder in Anglo, with a 7.5 per cent stake. The South African government is also a shareholder in BHP, with a 3.7 per cent stake.
BHP was examining how it might make a renewed offer after the standstill period comes to an end on November 29, according to bankers seeking advisory or financing roles. However, they cautioned that no decision had been made.
“The consensus view is that they are coming back, if they can figure it out,” said one banker. Another said it was an “open secret” that BHP was considering whether to make a bid.
BHP declined to comment.
On May 29, BHP walked away from a six week-long pursuit of UK-listed Anglo, triggering a six-month period during which the world’s largest miner was not allowed to make a fresh approach.
BHP has since said it had “moved on” from the Anglo deal and was now focusing on organic growth.
A takeover would secure BHP’s future as a dominant copper producer and help Henry cement his legacy, nearly five years into his tenure as CEO.
The timing of such a potential bid would be critical, bankers said. As part of its takeover defence, Anglo launched a radical restructuring with the sale of four large parts of its business, with the aim to turn the company into a streamlined copper and iron ore producer.
BHP was unlikely to move before such disposals, one person close to the matter said. It does not want to absorb the South African platinum mines and the De Beers diamond businesses, which Anglo was in the process of selling, the person said.
But if BHP waits until the disposals are completed, rival bidders may emerge. “Once [Anglo’s management] clean up, they will be an easy target,” said the chief executive of a major mining company.
The miner’s initial offer, which required Anglo to demerge its South African iron ore and platinum businesses, caused a political uproar in South Africa.
In late September, BHP chief financial officer Vandita Pant said the miner was comfortable walking away from Anglo. “There is a real yardstick of financial discipline on these issues, and that is something that we stuck to,” she said.
BHP is the second-largest copper producer in the world, on a consolidated volume basis.
Under UK takeover regulations, BHP must wait six months to announce another possible offer for Anglo or take certain steps towards such a proposal.
However, under certain circumstances, such as if a rival bidder emerges, then BHP would no longer be bound by that restriction.
Anglo declined to comment.
Additional reporting by Rob Rose in Johannesburg, Tom Wilson in London and Nic Fildes in Sydney
