REG - BHP Group Limited Anglo American PLC - Update on BHP offer for Anglo American

BHPAnnouncement

29/05/2024 07:15

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RNS Number : 2369Q  BHP Group Limited  29 May 2024

Exchange release
29 May 2024

 

Update on BHP's offer for Anglo American

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

THIS ANNOUNCEMENT IS AN ANNOUNCEMENT UNDER RULE 2.4 OF THE UK CITY CODE ON
TAKEOVERS AND MERGERS (THE UK CODE) AND IS NOT AN ANNOUNCEMENT OF A FIRM
INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO
CERTAINTY THAT AN OFFER WILL BE MADE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

Update on BHP's offer for Anglo American

On 22 May 2024, BHP Group Ltd (BHP) announced a revised proposal for a
combination with Anglo American plc (Anglo American) and the Board of Anglo
American announced an extension to the deadline for BHP to make an offer for
Anglo American to 29 May 2024 (Deadline).

BHP welcomed the extension as it provided the opportunity to engage with Anglo
American about its concerns regarding BHP's proposal. Since the extension to
the deadline, BHP has continued to work extensively to address those matters.
This has included several engagements with Anglo American and its advisers.

BHP's response to Anglo American

BHP has proposed a range of socioeconomic measures intended to address Anglo
American's concerns regarding our proposed transaction structure

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. BHP has
considered market precedent transactions and believes that the risks are
quantifiable and manageable.  BHP has already factored the costs associated
with these risks into the offer ratio of its proposal.

BHP believes that these proposed measures would provide greater economic
benefits to South Africa than Anglo American's Accelerating Value Delivery
plan, mitigate perceived value and completion uncertainty and ensure that any
costs are not borne disproportionately by Anglo American shareholders.

BHP has indicated that it would also be willing to discuss an appropriate
reverse break fee, payable by BHP, on failure to achieve the necessary
anti-trust and regulatory approvals, including in South Africa.

Socio-economic initiatives in South Africa

BHP's proposal comprises an all-share offer for Anglo American subject to the
pro-rata distribution by Anglo American of its entire shareholdings in Anglo
Platinum and Kumba Iron Ore to Anglo American shareholders immediately before
completion of the scheme of arrangement.  Anglo Platinum and Kumba Iron Ore
would continue to be listed in South Africa on the Johannesburg Stock Exchange
(JSE).  BHP intends to maintain its listing on the JSE and is expected to
achieve a JSE index weighting of approximately 5% on completion.

BHP continues to believe that there would be clear benefits to the South
African government, economy and communities from Anglo Platinum and Kumba Iron
Ore becoming major standalone entities listed on the JSE with significant
increased JSE index weightings. Anglo Platinum and Kumba Iron Ore would be
independently run by established South African-based management teams. As
self-governed companies, Anglo Platinum and Kumba Iron Ore would be better
placed to reinvest cash flow and capital directly into South Africa.

As part of its increased presence in South Africa, BHP intends to continue and
build on Anglo American's legacy of social investment and value creation in
South Africa including by:

 * if required to secure regulatory approvals, BHP sharing in the costs of
increased South African employee ownership of the listed South African
businesses;

 * establishing a Mining Centre of Excellence to support R&D, training and
promotion of South Africa as a premier mining destination;

 * maintaining current employment levels at Anglo American's Johannesburg office
to provide ongoing support to the South African assets to be acquired and
other assets in the combined group, as well as to Anglo Platinum and Kumba as
a third party service provider;

 * maintaining funding for Anglo American's charitable commitments in South
Africa at the current level;

 * supporting local South African procurement and engagement across mining
industry sectors and regions;

 * ensuring continued access for South African investors through the listing of
BHP on the Johannesburg Stock Exchange; and

 * maintaining Anglo American's existing South African Reserve Bank (SARB) and
National Treasury undertakings, to the maximum extent practicable.

These proposed measures are expected to be maintained for a period of at least
three years.

BHP believes that its proposal will contribute to South Africa and allow the
benefits of South African mining to be shared with more South African
stakeholders.

Next steps

BHP believes that the proposed measures it has put forward provide substantial
risk protection for Anglo American shareholders and supplement the significant
value uplift that Anglo American shareholders will receive from the potential
combination.  BHP believes a further extension of the Deadline is required to
allow for further engagement on its proposal.

This announcement does not amount to a firm intention to make an offer and
there can be no certainty that an offer will be made. There is no certainty
that any form of agreement or transaction will be reached or concluded.
Nothing in this announcement constitutes or intended to constitute a
post-offer undertaking for the purposes of Rule 19.5 of the UK Code.

This announcement is being made by BHP without prior agreement or approval of
Anglo American.

Authorised for release by Stefanie Wilkinson, Group Company Secretary.

Important Notices

Barclays Bank PLC, acting through its Investment Bank (Barclays), which is
authorised by the Prudential Regulation Authority and regulated in the United
Kingdom by the Financial Conduct Authority and the Prudential Regulation
Authority, is acting exclusively for BHP and no one else in connection with
the subject matter of this announcement and will not be responsible to anyone
other than BHP for providing the protections afforded to clients of Barclays
nor for providing advice in relation to the subject matter of this
announcement.

UBS AG London Branch is authorised and regulated by the Financial Market
Supervisory Authority in Switzerland. It is authorised by the Prudential
Regulation Authority (the PRA) and subject to regulation by the FCA and
limited regulation by the PRA in the United Kingdom. UBS AG London Branch and
UBS AG Australia Branch (together, UBS) provided financial advice to BHP and
no one else in connection with the process or contents of this announcement.
In connection with such matters, UBS will not regard any other person as its
client, nor will it be responsible to any other person for providing the
protections afforded to its clients or for providing advice in relation to the
process, contents of this announcement or any other matter referred to herein.

Lazard & Co., Limited (Lazard), which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting exclusively as
financial adviser to BHP and no one else in connection with the subject matter
of this announcement and will not be responsible to anyone other than BHP for
providing the protections afforded to clients of Lazard nor for providing
advice in relation to the subject matter or any other matters referred to in
this announcement. Neither Lazard nor any of its affiliates owes or accepts
any duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Lazard in connection with this announcement, any statement
contained herein or otherwise.

Publication on a website

In accordance with Rule 26.1 of the Code, a copy of this announcement will be
available at https://www.bhp.com (https://www.bhp.com) promptly and in any
event by no later than 12 noon (UK time) on the business day following this
announcement. The content of the website referred to in this announcement is
not incorporated into and does not form part of this announcement.

Disclosure requirements of the UK Takeover 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, 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.

 

 Contacts
 Media                                           Investor Relations

 media.relations@bhp.com                         investor.relations@bhp.com
 Australia and Asia                              Australia and Asia

 Gabrielle Notley                                John-Paul Santamaria

 +61 411 071 715                                  +61 499 006 018
 Europe, Middle East and Africa                  Europe, Middle East and Africa

 Neil Burrows                                    James Bell

 +44 7786 661 683                                +44 7961 636 432

 Americas                                        Americas

 Megan Hjulfors                                  Monica Nettleton

 +1 (403) 605-2314                               +1 (416) 518-6293

 Renata Fernandaz

 +56 9 8229 5357

 UBS (Joint Lead Financial Adviser to BHP)       +44 20 7567 8000 / +61 2 9324 3100

 David Roberts

 Sandip Dhillon

 Calvin O'Shaughnessy

 Campbell Stewart

 Barclays (Joint Lead Financial Adviser to BHP)  +44 20 7623 2323 / +27 (0) 10 0051303

 Philip Lindop

 Adrian Beidas

 Bruce Hart

 Akshay Majithia

 Lazard (Financial Adviser to BHP)               +44 20 7187 2000

 Cyrus Kapadia

 Spiro Youakim

 Gustavo Plenge

 BHP Group Limited

 ABN 49 004 028 07

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