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Wednesday, 22 May 2024 19:24

Anglo American rejects third takeover offer from BHP but extend deadline.

By Lehlohonolo Lehana.

Anglo American rejected a third takeover bid by BHP Billiton that valued the company at $49.2 billion (£38.6bn), but it has agreed to extend the deadline for the world's largest miner to make a formal offer.

"The Board considered BHP's Latest Proposal carefully, concluded it does not meet expectations of value delivered to Anglo American's shareholders, and has unanimously rejected it," Anglo American Chairman Stuart Chambers said in a statement on the London Stock Exchange website.

"However, the Board is willing to continue to engage with BHP and its advisers on this topic and has therefore requested a one week extension to the PUSU deadline which has been consented to by the Panel," Chambers added.

Before discussions were extended, under U.K. takeover rules BHP previously had until 5:00 p.m. London time to make a formal and final offer for Anglo following a drawn-out four-week bidding battle.

Shares of Anglo American rose shortly after the announcement before paring gains to trade down 0.6% by 4:10 p.m. London time. BHP shares fell more than 3.7%.

The Australia-based mining and metals giant made two prior nonbinding offers for Anglo as it seeks to shore up its dominance in the copper industry given the metal's key role in the energy transition and products such as electric vehicles, power grids and wind turbines.

The combined companies would form a behemoth in copper mining and the world's largest player in the space, supplying 10% of global output, according to a Reuters analysis.

The tug-of-war over Anglo's future is taking place against the backdrop of surging copper prices, driven by a wave of speculative money betting on future shortages that sent London Metal Exchange futures to a record earlier this week.