Mining giant rejects potential £31bn takeover bid
Anglo American, the business behind a massive fertiliser mine project in North Yorkshire, has rejected a potential £31bn takeover bid by rival BHP.
It has concluded that the approach “significantly undervalues Anglo American and its future prospects.”
Anglo American is currently developing the Woodsmith Project, a polyhalite mine to the south of Whitby in the North York Moors National Park.
Once operational, Polyhalite ore will be extracted via two mine shafts and transported outside of the National Park to Teesside via 37 kilometre tunnel.
Polyhalite is a naturally occurring mineral containing potassium, sulphur, magnesium and calcium – four of the six key nutrients required for plant growth. It will be sold as a multi-nutrient fertiliser suitable for organic use that can boost crop yields and aid more sustainable farming.
Responding to the takeover approach, Stuart Chambers, chairman of Anglo American, said: “Anglo American is well positioned to create significant value from its portfolio of high quality assets that are well aligned with the energy transition and other major demand trends.
“With copper representing 30% of Anglo American’s total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products, the Board believes Anglo American’s shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materialises.
“The BHP proposal is opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value upside participation of Anglo American’s shareholders relative to BHP’s shareholders.
“The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders.”
Anglo American shareholders have been advised to take no action in relation to the possible offer. The business also notes that there is no certainty that any “firm offer” will be made.
BHP’s potential bid comprised an all-share offer, with a requirement for Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum Ltd and Kumba Iron Ore Ltd to Anglo American shareholders.
If a deal does go ahead it would be one of the mining sector’s biggest mergers in many years.
Anglo American – which also runs mines in countries such as Chile, South Africa, Brazil and Australia – had a stock market value of around £29bn before the approach was publicised.
Australian-based BHP is the world’s largest publicly listed mining company, with a market valuation of around A$229bn/£119.5bn.
