🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

Anglo American confirms all-stock bid from BHP

Published 25/04/2024, 05:25 pm
© Reuters.  Anglo American confirms all-stock bid from BHP
UK100
-
BHP
-
AAL
-

Anglo American (JO:AGLJ) PLC (LSE:AAL) has confirmed it has received an all-paper bid approach from BHP (ASX:BHP) Ltd valuing the FTSE 100 group at £31.1 billion.

Terms of the offer would see Anglo shareholders get 0.7097 BHP shares for each share they own, plus a proportion of the shares from a demerger of its unlisted Anglo Platinum and Kumba iron ore businesses.

It puts a total value of approximately £25.08 per Anglo American ordinary share compared to the last closing price just above £22, including £4.86 in Anglo Platinum shares and £3.40 in Kumba shares.

BHP said the offer implies a 31% premium over the implied value of Anglo's unlisted assets.

"The board is currently reviewing this proposal with its advisers," Anglo told investors, as it cautioned: "There can be no certainty that any offer will be made nor as to the terms on which any such offer might be made."

Under takeover rules, BHP, which is valued at just shy of £120 billion, has until 5 pm on May 22 to lodge of formal offer.

If it goes ahead, the deal would be the biggest transaction in the sector since Glencore (LON:GLEN) and Xstrata's £43 billion merger 11 years ago.

Anglo's key holdings include copper mines located in Peru and Chile. The allure of these assets is magnified by the increasing global demand for copper, fueled by the shift towards renewable energy and electric vehicles.

"There would still be antitrust risk in copper, but there is a strategic rationale to this approach and structure," said the American investment bank Jefferies. "Other bidders could emerge."

In early trading, Anglo's stock was up 14% at 2,511.5p.

Jefferies reckons the fair value for the shares is 2,824p. "That is 28% above the [closing] Anglo share price, and we believe it is a reasonable starting point in estimating what price might be enough to get a deal across the finish line."

ADDS BROKER COMMENT AND SHARE PRICE

Read more on Proactive Investors AU

Disclaimer

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.