AFP – Mining behemoth BHP must overcome major hurdles to salvage its faltering pursuit of rival Anglo American, analysts said on Monday as a midweek deadline over the seismic takeover bid approaches.
United Kingdom (UK) – based Anglo American has already knocked back two attempts by the Australian giant, which has until 5pm London time today to up its offer, walk away, or launch a hostile takeover at enormous risk.
Any deal between two of the world’s largest resources companies would fundamentally reshape the sector, with far-reaching consequences for commodities markets and the global energy transition.
The latest bid sits at USD43 billion, which would rank as one of the largest mining deals ever seen. MineLife analyst Gavin Wendt said Anglo American’s disinterested board had kept the larger competitor at bay for now.
“Firstly, the biggest challenge for BHP so far is Anglo’s unwillingness to engage within the context of a very tight timeline,” Wendt told AFP.
“Anglo has already rejected two non-binding proposals from BHP, based on valuation and complexity.” BHP claims to be the largest mining company in the world with a market value of around USD148 billion.
Its desire to buy its longtime rival, which has a market value of about USD36 billion, first came to light in late April.
It is a high-stakes gambit from the company nicknamed the “Big Australian”.
If BHP ends up walking away from the negotiating table today, UK financial laws would prevent it from tabling another offer for at least six months, Wendt said.
A hostile takeover, seen as the least likely outcome, would preclude BHP from looking at Anglo American’s books – and force it to swallow underperforming parts of the company it would rather cast off.
