Anglo to launch defence after “accelerating” strategic review

Stuart Chambers, chairman, Anglo American ANGLO American will on Tuesday…

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Stuart Chambers, chairman, Anglo American

ANGLO American will on Tuesday unveil its eagerly anticipated defence against BHP’s takeover proposals after saying today it had accelerated a strategic review.

“The board is confident in Anglo American’s standalone future prospects,” it said in a statement to the London Stock Exchange.

“Anglo American has accelerated plans for delivery of its standalone strategy and will provide a detailed investor update on 14 May 2024,” it said.

The mining group was commenting after first explaining why it had rejected a second takeover proposal from BHP which it continued to argue undervalued the company and was overly complex, containing too much execution risk.

Duncan Wanblad, CEO of Anglo, is due to present at the Bank of America investment conference in Miami at 8.30am eastern standard time. His presentation is to be followed by BHP CEO Mike Henry.

This most likely sets the ball rolling decisively in what could be a prolonged and hostile takeover battle, potentially involving third party interlopers.

“The latest proposal from BHP again fails to recognise the value inherent in Anglo American,” said Stuart Chambers, chairperson of Anglo. He added that BHP’s proposal “continues to have a highly unattractive structure”.

BHP said today Anglo had rejected a second, improved takeover proposal in which it had offered 0.8132 shares for each Anglo share. This represents a 15% increase in the merger exchange ratio and increases the proposed aggregate ownership of Anglo shareholders in the combined group to 16.6% compared to 14.8% in BHP’s first proposal.

BHP’s revised proposal values Anglo at £34bn or £27.53 per share including Anglo American Platinum (£4.86/share) and Kumba Iron Ore (£3.40/share) shares.

As per BHP’s first proposal for Anglo, the Johannesburg-listed subsidaries would first be unbundled to shareholders.

Said Chambers: “This leaves Anglo American, its shareholders and stakeholders disproportionately at risk from the substantial uncertainty and execution risk created by the proposed inter-conditional execution of two demergers and a takeover.”

Anglo said in rejecting BHP’s second proposal that it had taken “extensive engagement” with its shareholders and stakeholders since BHP’s approach was made public on April 24.

Interestingly, the Guardian quoted fund managers from Ninety One, which owns 2.1% of Anglo and Coronation Asset Management, which owns 1.2% of Anglo as saying they might be partial to a second, higher BHP proposal as has transpired.

“Shareholders will talk their book. They will argue for both sides in order to the best value,” a market source said.

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