Anglo American says BHP proposal undervalues Anglo and future prospects

In a statement regarding a revised proposal from BHP (BHP) issued to the London Stock Exchange, Anglo American (NGLOY) stated: “The Board of Anglo American notes the announcement made by BHP Group Limited and confirms that on 7 May 2024 it received a second unsolicited, non-binding and highly conditional combination proposal from BHP. The structure of the Latest Proposal is unchanged from the proposal previously rejected on 26 April 2024. This comprises an all-share offer for Anglo American by BHP, with a requirement for Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American shareholders. The all-share offer and required demergers would be inter-conditional… The Board has considered the Latest Proposal with its advisers and concluded that it continues to significantly undervalue Anglo American and its future prospects. In addition, the Board has also taken into account the detailed feedback from its extensive engagement with Anglo American’s shareholders and stakeholders since the approach from BHP became public on 24 April 2024. Aside from significantly undervaluing Anglo American, the Latest Proposal continues to contemplate a structure which the Board believes is highly unattractive for Anglo American’s shareholders, given the uncertainty and complexity inherent, and significant execution risks. The requirement to pursue two contemporaneous demergers creates significant uncertainty, which falls disproportionately to Anglo American shareholders… Accordingly, the Board of Anglo American has unanimously rejected the Latest Proposal. The Board is confident in Anglo American’s standalone future prospects. Anglo American has accelerated plans for delivery of its standalone strategy and will provide a detailed investor update on 14 May 2024… The BHP proposal also continues to have a highly unattractive structure. 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 American shareholders are advised to take no action in relation to this matter. A further announcement will be made as and when appropriate. There can be no certainty that any firm offer will be made.”