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Anglo American has agreed to extend the deadline for BHP to formalise a takeover offer after the UK-listed group rejected a third approach from the world’s largest miner that values it at £38.6bn.
BHP now has until 5pm UK time next Wednesday to make a formal bid for its smaller rival, Anglo said in a statement on Wednesday.
The extension keeps BHP’s hopes alive that it can still secure the largest ever deal in the mining sector.
The Australian group said in a separate statement it had made a third all-share offer on Monday valuing Anglo at £31.11 a share based on the May 22 closing price. The latest bid, however, fails to address Anglo’s concerns about a complex deal structure that it believes places too much risk on its own shareholders.
BHP said its “final offer ratio” could be increased under certain conditions such as Anglo’s board agreeing to recommend a higher bid or another bid from a rival company.
Anglo’s board unanimously rejected the third proposal. Chair Stuart Chambers said the bid “does not meet expectations of value delivered to Anglo American’s shareholders” but that the board was “willing to continue to engage with BHP and its advisers on this topic”.
Anglo said the latest proposal valued its shares at £29.34 based on the April 23 closing price. BHP’s previous offer valued Anglo at £27.53 per share, or £34bn. It had initially offered £25 a share, or £31bn.
The deal would hand Anglo shareholders 17.8 per cent of BHP’s shares.
BHP chief executive Mike Henry said the company “looks forward to engaging with the board of Anglo American to explore this unique and compelling opportunity to bring together two highly complementary, world class businesses”.
BHP’s new all-share proposal would still require Anglo to spin off its South African platinum and iron ore businesses, a condition that has sparked controversy in South Africa in an election year.
Anglo said in a statement: “The board continues to believe that there are serious concerns with the structure given that it is likely to result in material completion risk and value impact that disproportionately falls on Anglo American’s shareholders.”
Earlier on Wednesday, the Public Investment Corporation, the South African state-owned investor that is Anglo’s second-biggest shareholder, said BHP needed to make a “meaningful revision” to its offer.
Anglo shares were up 0.7 per cent at £27.06.
