The Financial Times has reported that the key South African shareholders of Anglo American, who collectively own more than 15% of the company, are not averse to a takeover bid from BHP, the world’s largest listed mining group. However, they believe the offer could be made more tempting – with suggestions of an additional cash component to raise interest.
Fund managers with minority stakes in Anglo have hinted that a more generous, straightforward offer from BHP could be seen in a positive light. This could be an offer with a cash component or one that doesn’t necessitate the sale of Anglo’s South African assets.
However, some local fund managers have expressed concerns about the complexity of the deal structure, suggesting that it warrants a higher premium than if the entire business was being acquired.
Just last month, Anglo American turned down BHP’s US$39B takeover proposal, stating that it grossly undervalued the London-listed miner and its future potential. BHP’s proposal, which according to Reuters, involves Anglo spinning off its controlling stakes in local mining companies Anglo American Platinum (Amplats) and Kumba Iron Ore (valued together at about US$13B), has been seen as complex due to the political sensitivity surrounding the deal and its potential economic impact on the country, where the miner is a significant employer.
The South African government has been closely examining the proposed deal. The country’s mining minister, Gwede Mantashe, has expressed his reservations about BHP’s proposal, citing the country’s past experiences with BHP as “not positive”.
Anglo American has chosen to remain silent on the matter and BHP has yet to respond to a request for comment from Reuters.
