BHP pushes for more time in lengthy negotiations on $74 billion Anglo American takeover

Simone Grogan & Paul-Alain Hunt
The Nightly
2 Min Read
BHP, helmed by CEO Mike Henry \, is chasing a deal with Anglo America as the deadline to commit to an offer approaches.
BHP, helmed by CEO Mike Henry \, is chasing a deal with Anglo America as the deadline to commit to an offer approaches. Credit: Arsineh Houspian/TheWest

BHP is pressing takeover target Anglo American for more time to negotiate on a potential deal after putting a “range of socioeconomic measures” in a bid to quell concerns about the complicated deal structure.

The Big Australian told the ASX and London Stock Exchange on Wednesday there had been “several engagements” with Anglo and its advisers since an extension was granted last week.

BHP had until 5pm in London — 2am in Sydney — on Wednesday to commit to an offer, after Anglo agreed to extend a previous cut-off to allow for discussions.

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“BHP is confident that the measures it has proposed to the Board of Anglo American provide a viable pathway to resolve the matters raised by Anglo American and would support South African regulatory approvals,” the company told the market in the new update.

“BHP believes a further extension of the Deadline is required to allow for further engagement on its proposal.”

As part of the measures hoped to get a deal over the line, BHP said it would be willing to pay a “reverse break fee” if the transaction fails to get approval in South Africa.

BHP says it will also maintain employment levels in South Africa, promote the mining region and maintain Anglo’s charitable commitments in the country.

The way BHP’s deal has been structured requires Anglo to spin-off its platinum and iron ore businesses in the country, which has been a sticking point in the deal.

BHP’s third all-share proposal valuing Anglo at roughly $74b was rebuffed by the target last Wednesday, but opened talks between the two companies’ boards, extending the deadline for a firm bid to May 29.

If the two sides cannot reach an agreement and BHP walks away, it will have to stay away for six months.

More to come.

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