REG - Anglo American PLC - Anglo American rejects further BHP proposal

Anglo AmericanAnnouncement

22/05/2024 14:15

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RNS Number : 5084P  Anglo American PLC  22 May 2024

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

 

THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER
UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE"). THERE
CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE AND, SAVE AS SET OUT IN
BHP'S ANNOUNCEMENT DATED 13 MAY 2024 (AND SUBJECT TO THE RESERVATIONS SET OUT
THEREIN), THERE CAN BE NO CERTAINTY AS TO THE TERMS ON WHICH AN OFFER MAY BE
MADE.

 

 22 May 2024
 Anglo American rejects further BHP proposal and extends PUSU deadline to 29
 May 2024

On 20 May 2024, the Board of Anglo American (the "Board") received a third
unsolicited, non-binding and highly conditional takeover proposal from BHP
Group Limited ("BHP") (the "Latest Proposal").

 

Under the terms of the Latest Proposal, for each Anglo American share owned,
Anglo American's shareholders would receive:

·       0.8860 BHP shares; and

·     Ordinary shares in each of Anglo American Platinum Limited and of
Kumba Iron Ore Limited (distributed by Anglo American to its shareholders in
direct proportion to Anglo American's shareholders' effective interest in
Anglo American Platinum Limited and Kumba Iron Ore Limited).

 

The terms of the Latest Proposal represent a total value, based on undisturbed
share prices as at market close on 23 April 2024, of approximately £29.34 per
Anglo American share. On the basis of the 30-day and 90-day volume weighted
average share prices up to and including 23 April 2024, the terms of the
Latest Proposal would value Anglo American at £29.91 and £29.67 per Anglo
American share, respectively.

 

The Latest Proposal includes the same highly complex structure as the
proposals previously rejected on 26 April 2024 and 13 May 2024. This involves
an all-share offer for Anglo American by BHP, with a requirement for Anglo
American to complete two separate demergers of its entire shareholdings in
Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American's
shareholders. The all-share offer and required demergers would be
inter-conditional.

 

The Board and its advisers have engaged with BHP and its advisers on multiple
occasions with a particular focus on the proposed structure and associated
risks. 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 American's shareholders.

 

The requirement to pursue two contemporaneous demergers of publicly listed
companies alongside a takeover and the inter-conditional nature of the three
transactions is unprecedented, and as a result of a takeover would result in
additional material approvals and conditions, particularly in South Africa.
BHP's Latest Proposal is therefore in clear contrast to Anglo American's
simpler standalone plan to accelerate value delivery announced on 14 May 2024
and its proposal to demerge Anglo American Platinum Limited - a single
demerger that Anglo American has a proven track record in delivering.

 

The complex process proposed by BHP is likely to take 18 months or more to
complete and carries significant execution and completion risks relating to
both value and time. The key elements of Anglo American's standalone plan to
accelerate value delivery are expected to be substantively complete by that
stage. The approvals required in relation to BHP's Latest Proposal will also
likely result in conditions being imposed that disproportionately impact Anglo
American Platinum Limited and Kumba Iron Ore Limited and, therefore, Anglo
American's shareholders.

 

In addition, the Board has also considered detailed feedback from its
extensive engagement with Anglo American's shareholders and stakeholders since
the release of Anglo American's accelerated plans for delivery of its
standalone strategy on 14 May 2024, continuing its engagement with its
shareholders since the approach from BHP became public on 24 April 2024.

 

The Board is confident in Anglo American's standalone future prospects and
believes that Anglo American has set out a clear pathway to deliver the
acceleration of its strategy detailed on 14 May 2024, that is expected to
unlock significant and undiluted value for Anglo American's shareholders.

 

Taking the above considerations into account, the Board of Anglo American has
unanimously rejected the Latest Proposal.

 

In order to allow for further engagement with BHP on the mitigation of risks
and value impact on Anglo American's shareholders that are inherent in its
Latest Proposal, Anglo American announces that, in accordance with Rule 2.6(c)
of the Code, the Board has requested, and the Panel on Takeovers and Mergers
(the "Panel") has consented to, an extension to the date by which BHP is
required either to announce a firm intention to make an offer for Anglo
American in accordance with Rule 2.7 of the Code or to announce that it does
not intend to make an offer, in which case the announcement will be treated as
a statement to which Rule 2.8 of the Code applies. Such announcement must now
be made by not later than 5.00 p.m. on 29 May 2024. This deadline will only be
extended with the consent of the Panel in accordance with Rule 2.6(c) of the
Code.

 

Stuart Chambers, Chairman of Anglo American, commented:

 

"The Board is confident in Anglo American's standalone future prospects and
believes that Anglo American has set out a clear pathway and timeframe to
deliver the acceleration of its strategy to unlock significant and undiluted
value for Anglo American's shareholders. 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. In
particular, it does not address the Board's concerns about the structure,
which results in significant complexity, execution risks, an extended timeline
to completion and consequently has the potential for material value leakage to
be disproportionately suffered by Anglo American's shareholders. Multiple
engagements with the BHP team have not yet been able to resolve the concerns
on these issues.

 

"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."

 

There can be no certainty that any firm offer will be made and, save as set
out in BHP's announcement dated 13 May 2024 (and subject to the reservations
set out therein), there can be no certainty as to the terms on which an offer
may be made.

 

This announcement is being made without the agreement or approval of BHP.

For further information, please contact:

 

 Media                                                                              Investors

 UK                                                                                 UK

 James Wyatt-Tilby                                                                  Tyler Broda

 james.wyatt-tilby@angloamerican.com                                                tyler.broda@angloamerican.com
 (mailto:james.wyatt-tilby@angloamerican.com)

                                                                                  Tel: +44 (0)20 7968 1470
 Tel: +44 (0)20 7968 8759

                                                                                  Emma Waterworth
 Marcelo Esquivel                                                                   emma.waterworth@angloamerican.com (mailto:emma.waterworth@angloamerican.com)

Tel: +44 (0) 20 7968 8574
 marcelo.esquivel@angloamerican.com (mailto:marcelo.esquivel@angloamerican.com)

 Tel: +44 (0)20 7968 8891

                                                                                  Juliet Newth

                                                                                  juliet.newth@angloamerican.com (mailto:juliet.newth@angloamerican.com)
 Rebecca Meeson-Frizelle

                                                                                  Tel: +44 (0)20 7968 8830
 rebecca.meeson-frizelle@angloamerican.com

 (mailto:rebecca.meeson-frizelle@angloamerican.com)

 Tel: + 44 (0)20 7968 1374                                                          Michelle Jarman

                                                                                    michelle.jarman@angloamerican.com (mailto:michelle.jarman@angloamerican.com)

 South Africa

                                                                                  Tel: +44 (0)20 7968 1494
 Nevashnee Naicker

 nevashnee.naicker@angloamerican.com

 Tel: +27 (0)11 638 3189

 Sibusiso Tshabalala

 sibusiso.tshabalala@angloamerican.com
 (mailto:sibusiso.tshabalala@angloamerican.com)

 Tel: +27 (0)11 638 2175

 Centerview Partners UK LLP (Financial Adviser to Anglo American)

James Hartop   Tel: +44 (0) 20 7409 9700
 Edward Rowe
 Fiona McHardy

 

 Goldman Sachs International (Financial Adviser to Anglo American)

Mark Sorrell      Tel: +44 (0) 20 7774 1000
 David Hammond
 Bertie Whitehead

 

 Morgan Stanley & Co. International plc (Financial Adviser to Anglo
 American)

Simon Smith     Tel: +44 (0) 20 7425 8000
 Anthony Zammit
 Tom Perry

 

Goldman Sachs International (Financial Adviser to Anglo American)

 Mark Sorrell      Tel: +44 (0) 20 7774 1000
 David Hammond
 Bertie Whitehead

 

Morgan Stanley & Co. International plc (Financial Adviser to Anglo
American)

 Simon Smith     Tel: +44 (0) 20 7425 8000
 Anthony Zammit
 Tom Perry

 

Sources and Bases

 

1.   The total value of the Latest Proposal is based on share prices of BHP,
Anglo American Platinum Limited and Kumba Iron Ore Limited as at market close
on 23 April 2024, and GBP/AUD and GBP/ZAR exchange rates of 1.9190 and
23.7971, respectively as at 23 April 2024.

2.   Volume weighted average prices are derived from Bloomberg.

3.   The number of fully diluted Anglo American shares assumed excludes "Own
Shares" as defined in Anglo American's 2023 annual report.

 

 

 

IMPORTANT NOTICES

 

Centerview Partners UK LLP ("Centerview"), which is authorised and regulated
in the United Kingdom by the Financial Conduct Authority, is acting
exclusively as financial adviser to Anglo American and no one else in
connection with the matters set out in this announcement and will not be
responsible to anyone other than Anglo American for providing the protections
afforded to its clients or for providing advice in relation to the contents of
this announcement or any other matters referred to in this announcement.
Neither Centerview nor any of its affiliates, nor any of Centerview's and such
affiliates' respective members, directors, officers, controlling persons or
employees owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, consequential, whether in contract, in tort, in
delict, under statute or otherwise) to any person who is not a client of
Centerview in connection with this announcement, any statement contained
herein or otherwise.

Goldman Sachs International, ("Goldman Sachs") which is authorised by the
Prudential Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority in the United Kingdom, is
acting exclusively for Anglo American and no one else in connection with the
matters referred to in this announcement and will not be responsible to anyone
other than Anglo American for providing the protections afforded to clients of
Goldman Sachs International, or for providing advice in relation to the
matters referred to in this announcement.

Morgan Stanley & Co. International plc ("Morgan Stanley") which is
authorised by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and the Prudential Regulation Authority in the UK
is acting as financial adviser to Anglo American and no one else in connection
with the matters set out in this announcement. In connection with such
matters, Morgan Stanley, its affiliates and their respective directors,
officers, employees and agents will not regard any other person as their
client, nor will they be responsible to any other person for providing the
protections afforded to their clients or for providing advice in relation to
the contents of this announcement or any other matter referred to herein.

 

General information

 

In accordance with Rule 26.1 of the Code, a copy of this announcement will be
available subject to certain restrictions relating to persons resident in
restricted jurisdictions on Anglo American's website at www.angloamerican.com
(http://www.angloamerican.com) by no later than 12 noon (London time) on the
business day following the date of this announcement. The content of the
website referred to in this announcement is not incorporated into and does not
form part of this announcement.

 

The release, publication or distribution of this announcement in jurisdictions
outside the United Kingdom may be restricted by law or regulation and
therefore persons into whose possession this announcement comes should inform
themselves about, and observe, such restrictions. Any failure to comply with
the restrictions may constitute a violation of the securities laws or
regulations of any such jurisdictions.

 

Disclosure requirements of the Code

 

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in respect of which
it has been announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement of the
offer period and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in, and rights
to subscribe for, any relevant securities of each of (i) the offeree company
and (ii) any securities exchange offeror(s). An Opening Position Disclosure by
a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10th business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities exchange
offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror(s), save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the business day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.

 

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).

 

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.

 

 

Notes to editors:

Anglo American is a leading global mining company and our products are the
essential ingredients in almost every aspect of modern life. Our portfolio of
world-class competitive operations, with a broad range of future development
options, provides many of the future-enabling metals and minerals for a
cleaner, greener, more sustainable world and that meet the fast growing every
day demands of billions of consumers. With our people at the heart of our
business, we use innovative practices and the latest technologies to discover
new resources and to mine, process, move and market our products to our
customers - safely and sustainably.

 

As a responsible producer of copper, nickel, platinum group metals, diamonds
(through De Beers), and premium quality iron ore and steelmaking coal - with
crop nutrients in development - we are committed to being carbon neutral
across our operations by 2040. More broadly, our Sustainable Mining Plan
commits us to a series of stretching goals to ensure we work towards a healthy
environment, creating thriving communities and building trust as a corporate
leader. We work together with our business partners and diverse stakeholders
to unlock enduring value from precious natural resources for the benefit of
the communities and countries in which we operate, for society as a whole, and
for our shareholders. Anglo American is re-imagining mining to improve
people's lives.

www.angloamerican.com (http://www.angloamerican.com)

 

 

 

 

In this document, references to "Anglo American", the "Anglo American Group",
the "Group", "we", "us", and "our" are to refer to either Anglo American plc
and its subsidiaries and/or those who work for them generally, or where it is
not necessary to refer to a particular entity, entities or persons. The use of
those generic terms herein is for convenience only, and is in no way
indicative of how the Anglo American Group or any entity within it is
structured, managed or controlled. Anglo American subsidiaries, and their
management, are responsible for their own day-to-day operations, including but
not limited to securing and maintaining all relevant licences and permits,
operational adaptation and implementation of Group policies, management,
training and any applicable local grievance mechanisms. Anglo American
produces group-wide policies and procedures to ensure best uniform practices
and standardisation across the Anglo American Group but is not responsible for
the day to day implementation of such policies. Such policies and procedures
constitute prescribed minimum standards only. Group operating subsidiaries are
responsible for adapting those policies and procedures to reflect local
conditions where appropriate, and for implementation, oversight and monitoring
within their specific businesses.

 

Disclaimer

This document is for information purposes only and does not constitute, nor is
to be construed as, an offer to sell or the recommendation, solicitation,
inducement or offer to buy, subscribe for or sell shares in Anglo American or
any other securities by Anglo American or any other party. Further, it should
not be treated as giving investment, legal, accounting, regulatory, taxation
or other advice and has no regard to the specific investment or other
objectives, financial situation or particular needs of any recipient.

 

Forward-looking statements and third party information

This document includes forward-looking statements. All statements other than
statements of historical facts included in this document, including, without
limitation, those regarding Anglo American's financial position, business,
acquisition and divestment strategy, dividend policy, plans and objectives of
management for future operations, prospects and projects (including
development plans and objectives relating to Anglo American's products,
production forecasts and Ore Reserve and Mineral Resource positions) and
sustainability performance related (including environmental, social and
governance) goals, ambitions, targets, visions, milestones and aspirations,
are forward-looking statements. By their nature, such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of Anglo
American or industry results to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.

 

Such forward-looking statements are based on numerous assumptions regarding
Anglo American's present and future business strategies and the environment in
which Anglo American will operate in the future. Important factors that could
cause Anglo American's actual results, performance or achievements to differ
materially from those in the forward-looking statements include, among others,
levels of actual production during any period, levels of global demand and
commodity market prices, unanticipated downturns in business relationships
with customers or their purchases from Anglo American, mineral resource
exploration and project development capabilities and delivery, recovery rates
and other operational capabilities, safety, health or environmental incidents,
the effects of global pandemics and outbreaks of infectious diseases, the
impact of attacks from third parties on our information systems, natural
catastrophes or adverse geological conditions, climate change and extreme
weather events, the outcome of litigation or regulatory proceedings, the
availability of mining and processing equipment, the ability to obtain key
inputs in a timely manner, the ability to produce and transport products
profitably, the availability of necessary infrastructure (including
transportation) services, the development, efficacy and adoption of new or
competing technology, challenges in realising resource estimates or
discovering new economic mineralisation, the impact of foreign currency
exchange rates on market prices and operating costs, the availability of
sufficient credit, liquidity and counterparty risks, the effects of inflation,
terrorism, war, conflict, political or civil unrest, uncertainty, tensions and
disputes and economic and financial conditions around the world, evolving
societal and stakeholder requirements and expectations, shortages of skilled
employees, unexpected difficulties relating to acquisitions or divestitures,
competitive pressures and the actions of competitors, activities by courts,
regulators and governmental authorities such as in relation to permitting or
forcing closure of mines and ceasing of operations or maintenance of Anglo
American's assets and changes in taxation or safety, health, environmental or
other types of regulation in the countries where Anglo American operates,
conflicts over land and resource ownership rights and such other risk factors
identified in Anglo American's most recent Annual Report. Forward-looking
statements should, therefore, be construed in light of such risk factors and
undue reliance should not be placed on forward-looking statements. These
forward-looking statements speak only as of the date of this document. Anglo
American expressly disclaims any obligation or undertaking (except as required
by applicable law, the City Code on Takeovers and Mergers, the UK Listing
Rules, the Disclosure and Transparency Rules of the Financial Conduct
Authority, the Listings Requirements of the securities exchange of the JSE
Limited in South Africa, the SIX Swiss Exchange, the Botswana Stock Exchange
and the Namibian Stock Exchange and any other applicable regulations) to
release publicly any updates or revisions to any forward-looking statement
contained herein to reflect any change in Anglo American's expectations with
regard thereto or any change in events, conditions or circumstances on which
any such statement is based.

 

Nothing in this document should be interpreted to mean that future earnings
per share of Anglo American will necessarily match or exceed its historical
published earnings per share. Certain statistical and other information
included in this document is sourced from third party sources (including, but
not limited to, externally conducted studies and trials). As such it has not
been independently verified and presents the views of those third parties, but
may not necessarily correspond to the views held by Anglo American and Anglo
American expressly disclaims any responsibility for, or liability in respect
of, such information.

©Anglo American Services (UK) Ltd 2024.  (TM) and (TM) are trademarks of
Anglo American Services (UK) Ltd.

 

 

Legal Entity Identifier: 549300S9XF92D1X8ME43

 

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