Anglo American shareholders ready to accept simpler BHP deal
ANGLO American’s shareholders are ready to accept a simpler deal from BHP, paving the way for a potential takeover of the FTSE 100 mining giant.
Two significant Anglo shareholders said BHP’s current plan to spin off parts of Anglo as part of a £34bn all-stock takeover was too complicated. However, they indicated they would be willing to consider a revised bid that didn’t involve a break-up. One top 15 Anglo shareholder said: “Taking away that conditionality [of spinning out parts of the business] can improve things.”
It is a blow to Duncan Wanblad, the Anglo chief executive, who has been seeking to convince investors to support his rival plans to improve performance at the miner and unlock value.
Mike Henry, the BHP chief executive, spent part of last week at a mining conference in Miami, where he is understood to have taken soundings from Anglo shareholders about what price they would be willing to accept. Part of the investor feedback is also understood to include criticism about the complexity of the deal.
Another top 15 Anglo investor said: “We don’t need to accept any offer. There’s no gun to our head.”
Anglo’s management has rebuffed two bids from BHP over the past few weeks. However, the Australian mining giant is widely expected to return with a third offer this week ahead of a Takeover Panel deadline on Wednesday evening. BHP’s most recent offer was worth £34bn, or £27.53 per share. The proposed deal involved a two-step process where Anglo’s iron ore miner, Kumba, and platinum digger, Amplats, would first be divested to Anglo shareholders before BHP takes over the rest of the business. Anglo owns 79pc of Amplats and 70pc of Kumba, which are both listed in Johannesburg.
The complexity of the multistage process, and uncertainty around how the stakes in Amplats and Kumba would be valued post-spin-out, have made investors wary. A City fund manager who holds Anglo stock said: “BHP needs to understand how complex this deal looks to investors. They are going to end up with all sorts of bits and pieces. I would prefer BHP to do the heavy lifting and take away all of Anglo.”
Another British money manager said: “It’s difficult to arrive at what the value would be because of these pre-conditions attached.”
However, a third significant shareholder said the complexity was “not a priority” and they were more focused on the price BHP was offering.
BHP and Anglo declined to comment.