Anglo American rejects second, £34bn takeover offer from BHP

(Sharecast News) - BHP said on Monday that Anglo American has rejected a revised offer from the Australian miner which valued the company at £34bn.

The second takeover offer, which was made on 7 May, was as up from an initial offer of £31bn, received in April. It was rejected on 13 May.

The new offer was worth £27.53 per Anglo share, up from £25.08.

BHP chief executive Mike Henry said: "BHP put forward a revised proposal to the Anglo American board that we strongly believe would be a win-win for BHP and Anglo American shareholders. We are disappointed that this second proposal has bee rejected.

"The revised proposal represents a 15% increase in the merger exchange ratio and increases Anglo American shareholders' aggregate ownership in the combined group to 16.6% from 14.8% in BHP's first proposal.

"BHP and Anglo American are a strategic fit and the combination is a unique and compelling opportunity to unlock significant synergies by bringing together two highly complementary, world class businesses. The combined business would have a leading portfolio of high-quality assets in copper, potash, iron ore and metallurgical coal and BHP would bring its track record of operational excellence to maximise returns from these high-quality assets."

Anglo American chairman Stuart Chambers said: "The latest proposal from BHP again fails to recognise the value inherent in Anglo American. Anglo American shareholders are well positioned to benefit from increasing demand from future enabling products while the increasing capital intensity to bring greenfield supply online makes proven assets with world class resource endowments ever more attractive. The Anglo American team is focused on delivering against its strategic priorities of operational excellence, portfolio simplification and growth and is set to accelerate delivery in order to unlock this inherent value.

"The BHP proposal also continues to have a highly unattractive structure. This leaves Anglo American, its shareholders and stakeholders disproportionately at risk from the substantial uncertainty and execution risk created by the proposed inter-conditional execution of two demergers and a takeover."