Anglo American turns down £31bn takeover offer from Australian rival BHP

Anglo American Woodsmith Project - press shots from website
Anglo American Woodsmith Project - press shots from website -Credit:Anglo American

Mining group Anglo American has rejected a £31bn takeover approach from global rival BHP Billinton.

Anglo American, which is the company behind the multibillion-pound Woodsmith fertiliser project in North Yorkshire and Teesside, revealed on Thursday that that Australia’s BHP – the world’s biggest miner – had put forward the “unsolicited” and “highly conditional” takeover proposal.

It said it would review the approach with its advisers, but 24 hours later it has issued a statement to the Stock Exchange saying that the deal substantially undervalues it and urging shareholders not to accept the takeover offer.

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Anglo American’s statement also says that proposed terms for the takeover, which would involve the spinning out of two Anglo units, made the approach “highly conditional” and fraught with “uncertainty and complexity”.

Under the UK Takeover code, BHP now has until May 22 to announce a firm intention to make an offer for Anglo American or abandon that bid.

BHP’s proposal - which would be one of the biggest deals in the mining sector for more than a decade - woul see it offer £25.08 a share, including £4.86 a share in Anglo Platinum stock and £3.40 in Kumba Iron Ore company shares. The takeover would create the world’s biggest copper miner, with around 10% of global output, at a time of growing demand for the metal in the shift towards clean energy.

But if it went ahead, it would another blow to the London stock market, with the loss of Anglo American from the top tier of shares and another FTSE 100 mainstay.

Stuart Chambers, chairman of Anglo American, said: “Anglo American is well positioned to create significant value from its portfolio of high quality assets that are well aligned with the energy transition and other major demand trends. With copper representing 30% of Anglo American’s total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products, the goard believes that Anglo American’s shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materialises.

“The BHP proposal is opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value upside participation of Anglo American’s shareholders relative to BHP’s shareholders. The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders. Anglo American has defined clear strategic priorities - of operational excellence, portfolio, and growth - to deliver full value potential and is entirely focused on that delivery.”