Anglo American has rejected BHP’s $39 (R741) billion bid for its assets, excluding the platinum and iron ore units.
On Friday morning, Anglo American, whose shares surged on the JSE after announcing the proposed offer by BHP on Thursday, said the bid significantly undervalues its worth.
“The Board has considered the Proposal with its advisers and concluded that the Proposal significantly undervalues Anglo American and its future prospects,” Anglo American said.
It added that BHP’s unsolicited offer contemplates a restructuring of the company through disposal of Kumba Iron Ore and Anglo Platinum which the board “believes is highly unattractive” for shareholders.
This was “given the uncertainty and complexity inherent in the proposal, and significant execution” risks. Because of this, the board of Anglo American had “unanimously rejected” the all share purchase offer by BHP.
"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,” said Stuart Chambers, chairman of Anglo American.
Analysts had said BHP was primarily interested in Anglo American’s copper assets to grow its portfolio of the metal.
Stated Chambers: “With copper representing 30% 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 raised its copper production for the quarter to the end of March 2024 by 11% to 198 000 tonnes, a profile that could have attracted BHP in its quest to benefit from the global race to green transition.
BUSINESS REPORT