BHP Group’s effort to become the world’s biggest copper miner ran into another roadblock after smaller rival Anglo American rejected BHP’s second takeover proposal.
Mr. Henry now has to decide whether to raise BHP’s offer premium a second time in an effort to negotiate a friendly deal, launch a hostile offer or walk away. Under U.K. takeover rules, BHP has until May 22 to submit a binding takeover offer or abandon the pursuit of Anglo, which is less than a third of BHP’s size.
A series of blunders, including severe cost overruns at Anlgo’s capital-hungry Woodsmith polyhalite fertilizer mine in England, and surprising iron ore and copper productions shortfalls, hammered the company’s share price last year and early this year. The fallen price made Anglo vulnerable to takeover offers.
The new proposal was worth about US$43-billion but was still conditional on Anglo demerging Amplats and Kumba.