Home News Anglo American denies BHP's request to extend the deadline beyond the $50 billion offer

Anglo American denies BHP's request to extend the deadline beyond the $50 billion offer

by SuperiorInvest

Key takeaways

  • Anglo American said on Wednesday it will not grant BHP Group another extension of the negotiation deadline after rejecting BHP's latest takeover offer a week ago.
  • Since last month, Anglo has rejected three bids from BHP, with the latest valuing the mining giant at around $50 billion.
  • Anglo announced plans to spin off several subsidiaries after rejecting the second offer earlier this month.

Takeover talks between two of the world's largest mining companies appear to be over for now, as Anglo American said it will not grant BHP Group (BHP) another extension to address problems with the latest bid it rejected last week, which means that the negotiation of the companies. The deadline is Wednesday afternoon.

The announcement could mean at least a temporary end to BHP's takeover bid, which has included three bids, the latest of which valued Anglo American at about $50 billion. The London-based mining giant said on Wednesday that after “extensive engagement” with BHP over the past week, its latest offer still includes the “highly complex and unattractive structure” that led Anglo American to reject previous bids.

That “unattractive structure” includes a share offering that values ​​Anglo American at $49.87 billion, along with requirements that Anglo spin off two of its South African subsidiaries, a move Anglo said would be costly and create other regulatory hurdles.

BHP said in a statement on Wednesday that the company was confident it had provided “a viable path” to completing the deal, calling the risks identified by Anglo “quantifiable and manageable.”

How Anglo American and BHP got here

Last month, BHP opened negotiations with an offer of about $39 billion, hoping to strengthen its copper mining portfolio at a time of rising demand for copper for renewable energy projects and electric vehicles.

Citing the complexity of the deal and Anglo's belief that the offer undervalued the company, it was rejected, prompting BHP to increase its second offer to about $43 billion. After rejecting the second offer, Anglo announced restructuring plans to give the company a “radically simplified portfolio”, including plans to spin off or sell a number of assets.

Anglo rejected a third offer last week and agreed to extend the negotiation period by another seven days. The company said it was “confident about Anglo American's future prospects” when it rejected BHP's latest offer.

Australian mining giant BHP's American depositary receipts (ADRs) on the New York Stock Exchange (NYSE) rose 1.5% an hour before the opening bell, while Anglo shares on the Stock Exchange London fell 1.5% at 8:35 a.m. ET. Wednesday.

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