BHP (ASX:BHP) Group Ltd (LSE:BHP, ASX:BHP) confirmed it has seen a second bid approach rebuffed by rival Anglo American (JO:AGLJ) PLC (LSE:AAL).
While adding up to the same headline value - around £34 billion - and still requiring a slew of disposals, the transaction was structured to give Anglo investors a bigger stake in the enlarged business; around 16.6%, up two percentage points.
"BHP and Anglo American are a strategic fit and the combination is a unique and compelling opportunity to unlock significant synergies by bringing together two highly complementary, world-class businesses," he said the Aussie raider's CEO, Mike Henry.
"The combined business would have a leading portfolio of high-quality assets in copper, potash, iron ore and metallurgical coal and BHP would bring its track record of operational excellence to maximise returns from these high-quality assets."
A timely piece of research from RBC Capital suggests that BHP is trying to get Anglo on the cheap. On its sum-of-the-parts analysis, Anglo's shares are worth £31 - a significant premium to the £27.53 tabled by BHP.
However, there's also a reason for the latter's apparent parsimony. According to RBC, BHP would have to go all out (and enjoy a great deal of luck) to achieve the synergies and cost savings to ensure the takeover is earnings accretive.
"We estimate that greater than $11bn of synergies would be required for BHP to justify the bid at these levels - almost double our estimates- albeit a narrative of undervalued growth and under-supplied copper markets could be used to justify the transaction," said the Canadian investment bank.
The market was underwhelmed by BHP's marginally improved deal with the shares falling 1% to £27.46.