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BHP Bid for AGL – AGL Rejects Again but Leaves the Door Open
23 May 2024



The IEC have officially announced what some are calling a watershed moment for South Africa’s democracy. Our base case, and that shared by the majority of market participants, was for the ANC to win 45% of the vote, a coalition with the IFP and smaller parties formed, followed by business as usual.

The Revised Proposal

  • An all-share offer for Anglo American (AGL) by the BHP Group
  • Preceded by separate demergers by AGL of its entire shareholdings in Anglo American Platinum Limited (AMS) and Kumba Iron Ore Limited (KIO) to AGL shareholders
  • The two parts of the proposal are inter-conditional

Under the proposal, ordinary shareholders of Anglo American (AGL) would receive:

  • 0.8860 BHP shares for each ordinary share in AGL
  • Ordinary shares in AMS and KIO – in direct proportion to their effective interest in AMS and KIO via their AGL holding

At market prices (21 May 2024) the proposal represents:

  • An implied price of around £31.35 up from £26.86
    • Valuing AGL’s share capital at £38bn up from £32.6bn (+16%)

AGL Rejects

Within minutes of the updated offer, AGL rejected, stating “The Board continues to believe that there are serious concerns with the structure given that it is likely to result in material completion risk and value impact that disproportionately falls on Anglo America’s shareholders”.

In addition, AGL announced an extension to the date by which BHP is required to announce a firm intention to make an offer for AGL in accordance with the takeover code. Such announcement must now be made by no later than 5pm on 29 May 2024.

Hold Tight

BHP appears resilient in their efforts to acquire AGL’s assets and while AGL remain firm in their strategic outlook they have allowed an extension. The negotiations continue and, having taken risk off the table, we advise shareholders to hold tight.