Mining giant Anglo American rebuffs last minute takeover talks plea from BHP | City & Business | Finance

Anglo American has rejected a last minute plea from larger rival BHP to extend talks about a £38billion takeover, effectively ending the five week takeover battle for the mining giant.

BHP asked for an extension to the Wednesday, 5pm deadline it had under City takeover rules to file a binding offer for Anglo, after it had three takeover bids rejected by the mining giant. However, Anglo refused the 11th hour request, stating that BHP’s offer was still too low, too complex and risky to execute.

London-listed Anglo, which is best known for its De Beers diamonds business, said that none of the concessions made by BHP to allay its concerns in talks between the two sides were enough.

“BHP has not addressed the Board’s fundamental concerns relating to the disproportionate execution risk associated with the proposed structure and the value that would ultimately be delivered to shareholders,” Anglo said in a statement.

“Also taking into consideration detailed feedback from the extensive engagement with Anglo American’s shareholders and stakeholders, the Board has unanimously concluded that there is no basis for a further extension to the deadline.”

Sources close to Anglo believe that it has all but ended the takeover battle, as BHP was left with no time to structure a fourth friendly bid. Even if BHP decided to go hostile, Anglo believes that would still face opposition to its deal from shareholders and key stakeholders like the government of South Africa, where it has extensive operations.

BHP wants to buy Anglo to for its rich supply of copper and other metals that are essential to the transition to net zero carbon emissions. However, its offers were dependent on Anglo spinning off its platinum and iron ore arms.

As part of its takeover defence against BHP, Anglo said that it would sell or demerge De Beers, and dispose of its steelmaking coal, platinum and nickel divisions. The slimmed down, “future proof” Anglo will have three main divisions, copper, premium iron ore and crop nutrients, businesses its says are necessary for the clean energy shift, as well as food security.

Anglo American’s share price has gained more than 20 percent since BHP tabled its first offer in late April. XTB research director Kathleen Brooks warned “we could see some pullback in the share price” without interest from BHP.