Major Anglo investor says BHP bid needs 'meaningful revision'

South Africa's PIC owns roughly 7% stake in Anglo

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BHP faces 1600 GMT deadline to make firm offer

JOHANNESBURG, May 22 (Reuters) - BHP Group's $43 billion takeover proposal for smaller rival Anglo American needs a "meaningful revision", Anglo's second-biggest investor said on Wednesday, as the clock ticks for the world's No.1 miner to submit a binding offer.

BHP's latest all-share proposal, raised from an initial $39 billion, was dismissed by Anglo as significantly undervaluing the company and being difficult to execute.

BHP's offer should reflect both the value of existing Anglo assets and the future options and benefits that BHP can derive, specifically from Anglo's unlisted assets, said South Africa's Public Investment Corporation (PIC), which owns a roughly 7% stake in Anglo, second only to BlackRock's 9.6% holding.

"This would require a meaningful revision of the current BHP proposal that should take into consideration the material risks that current shareholders of both Anglo and its subsidiaries would have to assume," it said.

The PIC, which manages about 2.6 trillion rand ($143 billion) in assets, is Africa's second-biggest fund manager. It is also a top investor in Anglo Platinum and Kumba Iron Ore - two South African units of Anglo that BHP doesn't want included in its portfolio, should its deal succeed.

BHP, which has until 1600 GMT on Wednesday to make a binding offer, has insisted that Anglo divests its platinum and iron ore units in South Africa as a condition for the merger.

Anglo has rebuffed two all-share proposals from BHP as inadequate and too difficult to execute and last week unveiled plans for a break-up to focus on energy transition metal copper, while spinning out or selling its coal, nickel, diamond and platinum businesses.

Anglo CEO Duncan Wanblad's plan to refocus the company on copper, iron ore and fertiliser assets could lead investors to give it a premium share price rating similar to pure copper companies such as Antofagasta or Freeport-McMoRan in future, Ian Woodley, a portfolio manager at Old Mutual, said.

A failure to improve its market valuation could still make Anglo vulnerable to a takeover, he added.

Anglo shareholder Legal & General Investment Management (LGIM) said on Monday it supported the break-up plan and did not see a clear reason for the board to change stance on BHP's offer, unless there was a reasonable premium to the underlying fair value of Anglo's assets.