Julie Steinberg of The Wall Street Journal reports that the U.K.-listed mining giant Anglo-American AAL and its chairman say the proposal undervalues the company, clearing the way for a potential bidding war. He writes:
Anglo Americanย AALย 3.54% on Friday rejected aย $39 billion takeover proposalย from rival BHP, saying the bid โsignificantly undervaluesโ the company and setting the stage for a potential bidding war.
London-listed Anglo American said the unsolicited proposal, which was made earlier this month and which became public this week, features an unattractive structure that isย too uncertain and complex. […]
A tie-up between BHP and Anglo American, which would be the largest mining deal on record, would illustrate the growing importance of copper, aย metal essential to clean-energy products, to a sector that has longย relied on Chinese industrializationย to boost profits.
Copper represents some 30% of Anglo Americanโs output, while BHP counts a majority stake in Chileโs Escondida, the worldโs biggest copper mine, among its assets. BHP bought Australian copper-and-gold miner Oz Minerals for $6.34 billion in May last year,ย representing its biggest acquisition since 2011. […]
That said, a jump in Anglo Americanโs share price following BHPโs takeover offer indicates Elliott has already profited from its holding, potentially reducing any incentive for it to take any action until the outcome of BHPโs bid becomes clearer.
Angloโs stock on Friday traded above the implied value of BHPโs offer, indicating the market expects a higher bid to emerge.
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