By Melanie Burton and Lewis Jackson
PERTH (Reuters) – Shares of BHP Group (NYSE:) hit a three-month high on Tuesday, about 36 hours before the deadline to make a formal bid for rival miner Anglo American (JO:), which previously week turned down a sweet $43. billion-dollar takeover proposal.
The world’s largest listed mining stocks are benefiting from good news, including new stimulus for China’s property sector, record prices and a growing view that BHP will not make another move to Anglo, according to Andy Forster, senior investment officer at Argo Investments. BHP shareholder.
“We saw last week that they bounced back a bit after the rejection by Anglo,” he said. “I think they will remain disciplined. I would be surprised if they come back at this late stage given the lukewarm response from the Anglo board to the previous offers.”
Under British takeover rules, BHP has until 4pm GMT on Wednesday to make a binding offer for Anglo American, otherwise the company will be forced to walk away for at least six months. If the companies reach an agreement in the meantime, a postponement can be granted.
BHP declined to comment on Tuesday. Shares rose 0.5% to A$45.93 in afternoon trading. Anglo’s London-listed shares closed 0.1% higher at £26.80 on Monday.
Anglo’s board has already rejected two all-equity proposals from BHP as inadequate and too difficult to implement, and last week unveiled plans for a break-up to focus on energy transition metal copper as it moves away from its coal, nickel, diamond and platinum spin or sell. companies.
The copper assets are strategically important to BHP, but the longer it takes for the deal to close, the more likely it is that a competitor will make a rival bid for some of Anglo’s assets, said Hayden Bairstow, an analyst at Australian stockbroker Argonaut.
“The risk of waiting is that Anglo’s metallurgical coal assets go to someone else or an interloper like Glencore (OTC:) comes up with a more attractive deal,” he said.
It would take Anglo at least six to 12 months to carry out a sale process for the coal assets, according to an Australia-based investment banker who spoke on condition of anonymity.
Bankers are now jostling to get business from potential buyers, the person added.
Jefferies analysts said last week that BHP could be interested in the coal assets if it fails in its bid for Anglo as it owns nearby mines.
BHP would need to raise its latest offer by around 30% to reflect the fair value of Anglo and its key copper assets, JPMorgan analysts said in a note last week.
Both BHP offers required Anglo to divest its platinum and iron ore assets in South Africa, where it employs more than 40,000 people.
BHP has told investors it will not drop its demand for Anglo to spin off these companies as a condition of the deal.
($1 = 0.7869 pounds)
