Anglo American PLC (LSE:AAL) has turned down an all-stock offer of £31 billion from BHP Group Ltd (LSE:BHP, ASX:BHP), labeling the bid as ‘opportunistic’ and significantly undervaluing the company. The proposal was criticized for its complexity and the uncertainty it would bring.
BHP’s bid was primarily aimed at Anglo’s copper operations in Peru and Chile, while planning to divest from its iron ore and platinum businesses.
Anglo’s chairman, Stuart Chambers, expressed in a statement on Friday that he and the board are unwilling to compromise the potential of the copper operations by accepting what they see as a low and opportunistic offer at this stage.
Chambers highlighted, “Copper accounts for 30% of Anglo American’s total production. With strong, value-adding growth opportunities in copper and other structurally favorable products, the board is confident that Anglo American’s shareholders will see significant value increase as these trends fully develop.”
Industry analysts and commentators from the City view BHP’s bid as just the beginning of a likely contentious fight for Anglo American, noting that the surge in Anglo’s share price above BHP’s initial offer could attract additional bidders.
Rejecting the proposal, Anglo enjoys support from a large group of institutional investors, including Legal & General and Abrdn.
Chambers further clarified to investors, “The proposed deal structure is particularly unappealing, introducing considerable uncertainty and risks, predominantly shouldered by Anglo American, its shareholders, and other stakeholders.”
He concluded, “Anglo American is committed to its strategic priorities—operational excellence, portfolio management, and growth—to fully realize its value potential.”
