BHP will ultimately not have more time to perfect its proposal

BHP will ultimately not have more time to perfect its proposal
BHP will ultimately not have more time to perfect its proposal

[Article publié le mercredi 29 mai à 10h35, mis à jour à 12h14]New snub for the Australian mining giant. While BHP asked regulators on Wednesday for more time to prepare a revised takeover offer for its British rival Anglo American, the latter refused. BHP, which must make a firm offer on Wednesday before 6 p.m. Paris time or withdraw, “ failed to address the board’s fundamental concerns » ofAnglo American, the British company said in a statement.

An answer that will not do the Australian’s business.

BHP believes a further deadline extension is necessary to allow further work on its proposal “, he declared in a press release to the Australian Stock Exchange, this Wednesday, the day of the deadline for submitting offers.

Under British takeover rules, if BHP does not reach an agreement by 6 p.m., it will have to withdraw its offer.

A merger between two of the world’s largest mining companies would shake up the sector, and have far-reaching consequences for commodity markets and the global energy transition.

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Two offers rejected

At the beginning of May, BHP had already seen its offer rejected even though it had put 34 billion pounds (nearly 40 billion euros) on the table, or three billion pounds more than its initial offer to buy Anglo American. And the giant even raised its offer last week to 38.6 billion pounds (45.4 billion euros). But the new offer “ continues to significantly undervalue Anglo American and its future prospects », immediately replied the targeted company, its board of directors having unanimously rejected it.

As in its first offer, presented on April 16, BHP did not plan to take over two South African subsidiaries of Anglo American, the platinum activity and that of iron ore, which would be the subject of a split before the finalization of the operation. Which did not please the British group. Terms ” very unattractive for Anglo American shareholders, given the uncertainty and complexity they involve with significant execution risks ”, added the company.

The sum proposed by BHP was therefore considered too low given the difficulty of splitting the group before finalizing the takeover. A task that Anglo American now intends to carry out alone with the acceleration of its simplification strategy.

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Concern over South African assets

Especially since the split of Anglo American’s assets in South Africa is politically sensitive and has notably aroused opposition from Pretoria as the country holds elections on Wednesday. To note, Anglo American already announced at the start of the year its intention to cut thousands of jobs in its platinum activity in South Africa.

BHP therefore presented a series of measures this Wednesday aimed at allaying these concerns, in particular by committing to maintaining Anglo American’s workforce in Johannesburg. “ BHP believes its proposed measures provide substantial risk protection for Anglo American shareholders », Indicates the company in its press release.

Become the world’s leading producer of copper

If the Australian giant is so attached to this agreement, it is because the stakes are high for it. This acquisition would create the world’s main producer of copper, a key metal for the energy transition, enabling numerous industrial uses, such as the composition of electric vehicle batteries.

For Joshua Mahony, an analyst at Scope Markets interviewed by AFP, this second rejection signals that “ any transaction will not be done at a discount “, especially if ” another suitor gets involved “.

Moreover, ” BHP has made no secret that it is particularly targeting Anglo American’s copper assets and the fact that we had a two-year high on Friday shows that we will have to act quickly before we see » the price of these assets will rise further, he adds. Indeed, the price of copper has been rising sharply for a year (+22%), and Anglo American, like market experts, expect the red metal to continue this trend.

What’s more, the Australian giant, one of the largest mining companies in the world, recently experienced a drop in profit following the drop in global nickel prices and compensation paid after a mining disaster in 2015 in Brazil.

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