Anglo American’s board has unanimously rejected a $38.8 billion takeover bid by Australian giant BHP after concluding that the proposal “significantly undervalues” the JSE-listed mining company.
The company made the announcement on Friday morning.
According to a statement, the board also believes that the structure of the transaction — which would require the company to demerge its entire shareholdings in Anglo American Platinum and Kumba Iron Ore — “is highly unattractive for Anglo American’s shareholders, given the uncertainty and complexity inherent in the proposal and significant execution risks”.
BHP is eyeing Anglo’s copper assets. In its current form, the takeover proposal seeks to limit BHP’s exposure to Anglo’s beleaguered South African platinum and coal operations.
“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,” Anglo American board chair Stuart Chambers said.
Chambers noted that copper — which has seen steep price increases amid supply risks — represents 30% of Anglo American’s total production.
The board, he said, 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”.
Chambers described BHP’s proposal as “opportunistic”.
“The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders,” he added.