Anglo American has been an increasingly vulnerable target for one of its larger rivals for the best part of two years, but the poison pills in its sprawling portfolio deterred predators. Now BHP has a plan for excising the most poisonous of those pills.
After Bloomberg flushed out BHP’s approach, Anglo American confirmed that the world’s largest mining company had presented it with an unsolicited all-share takeover proposal.
Anglo, which has a market capitalisation of around $52 billion, mines everything from copper to diamonds, iron ore to metallurgical coal. It even has a potash-like project in the UK.
For BHP chairman Ken MacKenzie, a successful takeover of Anglo would be a follow-up to the $9.6 billion acquisition of Oz Minerals.Credit: David Mariuz
Its share price has nearly halved over the past two years and is down more than 12 per cent over the past year after fissures opened up in its diamond, platinum and South African iron ore businesses. (It was down 30 per cent only a few weeks ago, suggesting a possible leak of BHP’s interest).
In confirming the BHP approach, Anglo said the offer would be preceded by separate demergers by Anglo of its entire shareholdings in Anglo American Platinum and Kumba Iron Ore to Anglo’s shareholders.
Amplats, as it is commonly known, is the world’s largest producer of platinum and related metals like palladium and rhodium, where prices have slumped as long-term prospects for metals used largely in catalytic converters for internal combustion engines are under a cloud.
South Africa’s iron ore business, like many South African businesses, has been savaged by the country’s failing transport and power networks.
The issues within those units, an unexpected and sizeable cut to Anglo’s South American copper production and a massive $US1.6 billion ($2.5 billion) writedown in the value of the De Beers diamond business, were responsible for the steep fall in Anglo’s earnings last year. Underlying earnings slumped 30 per cent to $US9.96 billion, and Anglo’s dividend was almost halved.
BHP’s clever plan for dealing with Anglo’s poison pills
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25.04.2024
Anglo American has been an increasingly vulnerable target for one of its larger rivals for the best part of two years, but the poison pills in its sprawling portfolio deterred predators. Now BHP has a plan for excising the most poisonous of those pills.
After Bloomberg flushed out BHP’s approach, Anglo American confirmed that the world’s largest mining company had presented it with an unsolicited all-share takeover proposal.
Anglo, which has a market capitalisation of around $52 billion, mines everything from........
© The Sydney Morning Herald
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