On the Melbourne Stock Exchange in Australia, shares of global mining giant BHP closed down almost 3% today. Yesterday, Anglo American rejected its advances for the third time, despite an improved buyout offer. The latest proposal, submitted on Monday May 20 to the board of directors, proposed to exchange 0.8860 BHP shares for 1 Anglo American share, compared to the initial proposal of April 16 of 0.7097 shares, increased to 0.8132 actions on May 7. This information was made public yesterday by BHP, whose aim is to increase its copper extraction capacities, a metal essential for the electrification of the world, electric cars and the power supply of data centers, a sort of neural network for artificial intelligence. The price of red gold reached new records this week, at more than $11,000 per tonne on the London Metal Exchange.
This new auction valued Anglo American, born in South Africa but listed in London, at nearly 39 billion pounds (around 45 billion euros and 49 billion dollars, which would make it a deal record in this sector). It remained subject to the separation of assets in platinum (Anglo Platinium or Amplats) and iron ore (Kumba) in South Africa. Anglo American decided on its own, in mid-May, to separate (sale or split) from the diamond merchant De Beers, which was one of its jewels for ten years. The mining group also announced, a little over a month ago, the sale of its steelmaking coal activities.
“The new offer thus represents a premium of 47% on Anglo’s price on April 23 before the acceleration of rumors of an offer and, for the assets retained by BHP alone, a premium of 67% on their value implied by the walkreacted this morning analyst Maxime Kogge from the private bank Oddo BHF. In our eyes, this price is now attractive since it exceeds 29 pounds [par action] which we consider acceptable corresponding to the stand-alone value of 22.5 pounds in our sum of the parts plus a premium of 30%. »
However, Anglo American believes that at this price, its plan to refocus on high-end copper and iron ore remains more advantageous for its shareholders. “We don’t necessarily agree”, replies Christopher LaFemina of the investment bank Jefferies, who nevertheless welcomes the fact that discussions between the groups are continuing. Because, in fact, Anglo American has decided to extend the PUSU deadline to May 29 (5 p.m. UK time). The PUSU, “Put up or Shut up”, is a rule of the public takeover bid (OPA) code which says that the offeror must either announce a fully financed firm offer within 28 days of its first offer, or inform that he will ultimately not make an offer (in which case he will be forced to step aside for at least six months). This deadline should have expired yesterday.
The disagreement is not “insurmountable”
At Jefferies, it is believed that the discussions should result in an offer from BHP which will be supported by the board of directors of Anglo American. Oddo BHF notes that “the group no longer mentions price as a blocking factor. It particularly emphasizes the risks linked to the parallel split of Anglo Platinum and Kumba. Even if they are not explained, in our opinion it concerns both the possibility for South Africa to oppose the planned transactions and the return of paper from Anglo Platinum and Kumba, part of the shareholders selling their securities so as not to be directly exposed to South Africa. However, we do not believe that this disagreement is insurmountable. »
BHP cannot own both Kumba and Minas Rio, Brazil, due to antitrust concerns in the iron ore sector, and it is ” unlikely ” that BHP agrees to own Amplats “due to safety concerns in the exploitation of platinums”according to Jefferies.
Chile is the largest producer of copper, ahead of Peru and China, according to recent data condensed by Bank of America. In Chile, Anglo American is the owner of the Los Bronces mine, one of the largest in the world. “The acquisition will help BHP access the mining industry in South America, where the company currently does not have a significant presencerecently explained analyst Sathiya Narayanan Jalapathy at GlobalData. If the deal goes through, BHP will have access to three of the world’s largest copper mines: Collahuasi (44% stake), Los Bronces (50.1%), El Soldado (50.1%) and Quellaveco (60%). %) »all located in Chile except the last one which is in Peru.
Anglo American shares have risen this month to more than 28 pounds in London, their highest level in just over a year (+40% approximately since the start of the year).
