Anglo American has rejected BHP Group’s request for more time to discuss a $49 billion takeover offer, likely ending a five-week pursuit by the larger rival. Anglo had previously granted BHP a one-week extension until 1600 GMT on Wednesday to its original May 22 deadline to submit a binding offer, following the rejection of a third takeover proposal deemed too complex.
BHP still has until the deadline to make a firm offer or withdraw. The company has previously indicated it would not make a hostile bid and did not immediately respond to requests for comment.
BHP’s shares closed flat on Wednesday at A$45.08, while Anglo’s shares remained little changed at 1045 GMT. Anglo had agreed to discussions with BHP to address concerns over the proposed deal structure, particularly the condition that Anglo unbundle its South African platinum and iron ore units before the takeover.
BHP stated it needed more time to engage with Anglo and outlined commitments to minimize regulatory risks in South Africa, including job security for South African employees and covering the costs of increased employee ownership required in any demerger.
However, Anglo indicated that these commitments were insufficient. Anglo’s statement highlighted that BHP consistently reiterated the belief that the risks of its complex structure were not material while refusing to amend the proposed structure to assume these risks.
Founded in Johannesburg in 1917, Anglo employs over 40,000 South Africans. A withdrawal by Anglo would further impact the country’s economy, where miners are already reducing jobs and investments due to declining platinum demand. The decision coincides with South African elections, with the African National Congress facing potential loss of its majority after 30 years, partly due to high unemployment and economic stagnation.
JP Morgan analysts estimated that a BHP takeover of Anglo could lead to $4.3 billion in outflows from South Africa and weaken the rand. Hayden Bairstow, an analyst at broker Argonaut in Perth, noted that BHP’s request for more time aimed to address Anglo’s board concerns regarding South African jobs and regulations.
A source close to Anglo’s thinking indicated that its investors shared reservations about BHP’s proposal, feeling that the risks and price were not fully considered by BHP. BHP’s latest proposal valued Anglo at 29.34 pounds per share, or 38.6 billion pounds ($49 billion), aiming to strengthen BHP’s position in copper and other metals essential for clean energy transitions.
Anglo has its own plan to divest less profitable assets and focus on expanding copper output. George Cheveley, a portfolio manager at Ninety-One, expressed that Anglo’s rejection was expected, as BHP’s statement lacked compelling arguments.
Anglo is attractive to competitors for its copper assets in Chile and Peru, crucial for electric vehicles, power grids, and construction. A person familiar with the situation suggested it was virtually impossible for BHP to submit an offer by Wednesday’s deadline, potentially ending the deal. 
