Anglo American rejects third and final takeover proposal from BHP

(Sharecast News) - Anglo American said on Wednesday that it has rejected a third and final takeover proposal from Australia's BHP which values the miner at £38.6bn.

The latest offer, received on Monday, values each Anglo share at £29.34. This is up from an initial offer of £25.08 made in April and a second offer of £27.53 made on 7 May.

The latest offer also continues to include what Anglo referred to as "the same highly complex structure" as the proposals previously rejected, whereby the deal would need to be preceded by separate demergers of Anglo's entire shareholdings in its platinum business and Kumba Iron Ore to its shareholders.

Anglo said: "The board and its advisers have engaged with BHP and its advisers on multiple occasions with a particular focus on the proposed structure and associated risks. 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.

"The requirement to pursue two contemporaneous demergers of publicly listed companies alongside a takeover and the inter-conditional nature of the three transactions is unprecedented, and as a result of a takeover would result in additional material approvals and conditions, particularly in South Africa."

It said BHP's proposal is therefore "in clear contrast" to its own simpler standalone plan to accelerate value delivery, announced, on 14 May, and its proposal to demerge Anglo American Platinum Limited - "a single demerger that Anglo American has a proven track record in delivering".

Anglo chairman Stuart Chambers said: "The board is confident in Anglo American's standalone future prospects and believes that Anglo American has set out a clear pathway and timeframe to deliver the acceleration of its strategy to unlock significant and undiluted value for Anglo American's shareholders.

"The board considered BHP's latest proposal carefully, concluded it does not meet expectations of value delivered to Anglo American's shareholders, and has unanimously rejected it."

Nevertheless, Anglo said it remained willing to engage with BHP and its advisers and has therefore requested a one week extension to the 'put up or shut up' deadline for a bid.