Anglo American (JO:AGLJ) PLC (LSE:AAL) has refused suitor BHP (ASX:BHP) Group's (LSE:BHP, ASX:BHP) request for an extension to its 'put up or shut up' takeover deadline.
The Australian mining giant offered new concessions, including a potential 'reverse break fee', and wants to continue talks.
But after Anglo and BHP last week agreed on extending the deadline for BHP to make an offer to today, May 29, Anglo said this morning that
The Anglo American PLC (LSE:AAL) board thinks BHP has not assuaged its concerns about the "disproportionate execution risk" associated with the proposed takeover structure and the value for shareholders.
This means BHP has to make a firm offer no later than 5pm today or walk away.
BHP's latest concessions
In an earlier statement, BHP said it has been working "extensively" to address matters raised by the FTSE 100-listed group and has proposed a range of "socioeconomic measures" that it said are intended to address these concerns about how the deal is structured, support regulatory approval in South Africa and offer "greater economic benefits" than Anglo's proposed restructuring.
The Australian group said it would also be willing to discuss a break fee that it would pay if regulatory and other approvals are not achieved.
BHP suggestions include distributing shares of Anglo Platinum and Kumba Iron Ore, maintaining Johannesburg Stock Exchange listings, and committing to socio-economic initiatives in South Africa for at least three years.
This includes employee ownership, creating a Mining Centre of Excellence, employment and funding commitments, local procurement support, and maintaining South African regulatory undertakings for at least three years.
Anglo response
Anglo said it did not believe there was much new in BHP's proposal, which it said continues to include "the same highly complex and unattractive structure as the proposals previously rejected" over a month ago, including carrying out two demergers of Anglo's publicly listed subsidiaries, Anglo American Platinum and Kumba, while also completing the main takeover.
The "inter-conditional nature of the three transactions is unprecedented", it said, with regulatory approvals in various jurisdictions "likely to result in material conditions being imposed that would disproportionately impact the value of Anglo American Platinum and Kumba and, therefore, the value delivered to Anglo American's shareholders".
Throughout the talks, Anglo said that BHP has stated its belief that the risks of its structure are not material and that it is unwilling to amend the proposed structure to take on these risks itself.
It feels the BHP proposal is "in clear contrast" to its own standalone restructuring plan announced two weeks ago, which it aruges is "simpler", although analysts have said there was little difference from the structure proposed by BHP.