BHP (ASX:BHP) shares rose slightly after it withdrew from its attempt to buy Anglo American, but the latter’s shares fell nearly 4% in the wake of its refusal to continue talking on the proposal from the world’s biggest miner.
Wednesday saw BHP issue a statement at 3:56 pm Sydney time outlining a request for a second week’s extension of its offer (the third) with a long explanation of what it would do in South Africa to avoid having to take control of Anglo’s two major assets there—Amplats, the platinum company, and Kumba Iron Ore.
That appeal failed with Anglo rejecting the extension request, so the bid is off the table for six months, unless Anglo wants to talk and gets the consent of the takeovers panel.
BHP shares rose 0.77% in London, but Anglo shares dropped 3.91%, with the value heading back to where it was on the day just after the first offer emerged.
BHP shares closed at $45.08 on Wednesday, unchanged from Tuesday’s end.
With Wall Street selling off on growing concerns (yet again) that a rate cut might be delayed in the US, BHP shares are likely to battle to enjoy any bounce from investors happy the company isn’t going to be diverted by bedding down Anglo.
In its second statement published Wednesday, BHP CEO Mike Henry said that the firm did not intend to make a formal offer for its London-listed rival.
“While we believed that our proposal for Anglo American was a compelling opportunity to effectively grow the pie of value for both sets of shareholders, we were unable to reach an agreement with Anglo American on our specific views in respect of South African regulatory risk and cost and, despite seeking to engage constructively and numerous requests, we were not able to access from Anglo American key information required to formulate measures to address the excess risk they perceive,” Henry said.
“We remain of the view that our proposal was the most effective structure to deliver value for Anglo American shareholders, and we are confident that, working together with Anglo American, we could have obtained all required regulatory approvals, including in South Africa,” he added.
The miners had until 5 pm London time to reach an agreement following a weeklong extension of last week’s first deadline.
In its first statement, BHP requested another week, saying it “believes a further extension of the Deadline is required to allow for further engagement on its proposal.” It noted that it had proposed a number of “socioeconomic measures” to address concerns over its bid, but added that more time was needed for discussions.
Anglo American responded that its board “unanimously concluded that there is no basis for a further extension to the [Put Up or Shut Up] deadline,” which was 5 pm Wednesday, UK time.
