BHP Group is reportedly contemplating making an enhanced offer for Anglo American following the rejection of its initial $39 billion proposal by the London-listed miner. A source familiar with the matter disclosed that BHP is engaged in discussions regarding a revised bid for Anglo American that is expected to be presented in the upcoming weeks. The group is currently deliberating on the size and structure of the new proposal, and a final decision has yet to be reached.
Response from BHP and Anglo American
When approached for a comment, BHP stated that it refrains from responding to “rumour and speculation.” Conversely, Anglo American did not immediately address the Reuters inquiry regarding the situation. Anglo American turned down BHP's $39 billion takeover offer, asserting that it substantially undervalues the company and its future potential. As per UK takeover regulations, BHP is mandated to submit a formal offer for Anglo American by May 22. It is anticipated that BHP will increase its current bid of 25.08 pounds per share in an effort to secure a deal that would establish the world's largest copper mining entity.
Investor Sentiments
Several investors in Anglo American, preferring to remain anonymous due to the sensitivity of the issue, have opined that the company's true value lies around 30 pounds per share. However, Anglo American's shares concluded at 26.43 pounds at the end of trading on Friday. The primary focus of BHP's bid revolves around copper, with a potential merger with Anglo American leading to the creation of a conglomerate responsible for approximately 10% of the global copper production. Copper's essential role in various industries, including electric vehicles, power grids, and construction, underscores the strategic significance of such a merger.
BHP Group's deliberations on a revised bid for Anglo American represent a pivotal moment in the mining industry. As the deadline for submitting a formal offer approaches, both companies are expected to engage in intense negotiations to reach a mutually beneficial agreement. The outcome of this potential merger could have far-reaching implications for the global copper market and the broader clean energy transition. Investors and industry observers will closely monitor the developments in the coming weeks to assess the impact of BHP's improved offer on Anglo American and the mining sector as a whole.