Wrap Text
Revised Proposal for Anglo American plc
BHP Group Limited
BHP Group Limited ABN 49 004 028 077
Registered in Australia
Registered Office: Level 18, 171 Collins Street Melbourne VIC 3000
Share code: BHG
ISIN: AU000000BHP4
Exchange release
13 May 2024
Revised Proposal for Anglo American plc
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 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
Revised Proposal by BHP
BHP confirms that on 7 May 2024 it made a revised proposal to the Board of Directors of Anglo
American regarding a potential combination to be effected by way of a scheme of arrangement
(Revised Proposal). 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 American Platinum Ltd
(Anglo Platinum) and Kumba Iron Ore Ltd (Kumba) to Anglo American shareholders immediately
before completion of the scheme of arrangement. The Revised Proposal follows BHP's initial proposal
for a potential combination with Anglo American which was made to the Board of Directors of Anglo
American on 16 April 2024 (Initial Proposal).
The Revised Proposal was rejected by the Anglo American Board on 13 May 2024. BHP is disappointed
that the Anglo American Board has chosen not to engage with BHP with respect to the Revised Proposal
and the improved terms. BHP continues to believe that a combination of the two businesses would
deliver significant value for all shareholders.
Structure of Revised Proposal
The Revised Proposal reflects BHP's transaction structure set out in the Initial Proposal. Under the
Revised Proposal, BHP has increased the number of BHP shares that would be received by Anglo
American shareholders.
Under the terms of the Revised Proposal, ordinary shareholders of Anglo American would receive:
• 0.8132 BHP shares for each ordinary share they own in Anglo American (BHP Share
Consideration), which represents Anglo American shareholders owning, in aggregate,
approximately 16.6% of the combined BHP and Anglo American group on completion of the
potential combination; and
• ordinary shares in Anglo Platinum and Kumba (which would be distributed by Anglo
American to its shareholders in direct proportion to each shareholder's effective interest in
Anglo Platinum and Kumba) (the Demergers).
BHP confirms that the transaction structure has been designed to ensure the Demergers are sequenced
to complete immediately before the scheme of arrangement becomes effective, which will result in
Anglo American shareholders receiving shares in Anglo Platinum and Kumba when they receive the
BHP Share Consideration. BHP would also assume the liabilities of Anglo American on completion,
which would include the costs associated with completing the Demergers and any other transaction
related costs.
BHP is committed to a combination that leverages the best of both BHP and Anglo American and
intends to offer Anglo American up to two positions on the Board of the combined entity.
The Revised Proposal is non-binding and subject to customary conditions including completion of due
diligence to the satisfaction of BHP. Anglo American has been offered reciprocal due diligence on BHP.
BHP will work closely and constructively with competition regulators and provide the information they
need to assess the potential transaction. BHP is confident that it can obtain all required regulatory
approvals and consummate a transaction that benefits customers globally.
Mike Henry, BHP Chief Executive Officer said:
"BHP put forward a revised proposal to the Anglo American Board that we strongly believe would be a
win-win for BHP and Anglo American shareholders. We are disappointed that this second proposal has
been rejected.
The revised proposal represents a 15% increase in the merger exchange ratio and increases Anglo
American shareholders' aggregate ownership in the combined group to 16.6% from 14.8% in BHP's
first proposal.
BHP and Anglo American are a strategic fit and the combination is a unique and compelling opportunity
to unlock significant synergies by bringing together two highly complementary, world class businesses.
The combined business would have a leading portfolio of high-quality assets in copper, potash, iron ore
and metallurgical coal and BHP would bring its track record of operational excellence to maximise
returns from these high-quality assets.
The combined business would also have the balance sheet strength, capital discipline and operational
capability to execute the attractive pipeline of growth options in BHP and Anglo American's portfolios.
In putting forward a revised proposal, we have been guided by our capital allocation framework and our
view of the fundamental value of Anglo American and BHP.
The combination is consistent with BHP's strategy and the revised proposal is underpinned by a focus
on delivering long term fundamental value."
Value of Revised Proposal
The terms of the Revised Proposal represent an increase over the Initial Proposal:
• of 14.6% in the merger exchange ratio1 and the BHP Share Consideration;
• from 14.8% to 16.6% in Anglo American shareholders' aggregate ownership in the combined
group on completion of the potential combination;
• of 14.2% in the undisturbed value offered (in US$ billion, as at 23 April 2024 being the last
trading day before the press speculation about the Initial Proposal) for Anglo American's
unlisted assets2,3; and
• of 11.0% in the spot value offered (in US$ billion, as at 13 May 2024) for Anglo American's
unlisted assets4 compared to the undisturbed value.
The terms of the Revised Proposal represent a total value, based on undisturbed share prices, of
approximately £27.53 per Anglo American ordinary share including £4.86 in Anglo Platinum shares and
£3.40 in Kumba shares, valuing Anglo American's share capital at approximately £34 billion, and
implying a:
• premium on the undisturbed market value of Anglo American's unlisted assets of
approximately 50% (in US$ billion, as at 23 April 2024 being the last trading day before the
press speculation about the Initial Proposal);
• premium on the undisturbed market value of Anglo American's unlisted assets2 of
approximately 104% based on the volume weighted average closing price of Anglo
American's shares (adjusted for the attributable volume weighted average closing prices of
Anglo Platinum and Kumba) in the 90 trading days prior to and including 23 April 2024; and
• 37% premium to the broker median net asset value5 of Anglo American's unlisted assets
based on Anglo American's undisturbed closing price and FX rates on 23 April 2024 and a
33% premium based on spot share prices and FX rates on 10 May 2024 (and 13 May for
BHP share price). The terms of the Revised Proposal represent a total value, based spot
share prices and FX rates on 10 May 2024 for Anglo Platinum and Kumba shares and 13
May 2024 for BHP shares of approximately £27.94 per Anglo American ordinary share.
BHP believes that this Revised Proposal represents a compelling opportunity for long term fundamental
value-creation for both sets of shareholders.
Benefits to Anglo American shareholders
The benefits of the Revised Proposal to Anglo American shareholders and other stakeholders include:
• The combination would allow Anglo American shareholders to realise a greater immediate
and substantial premium over the current value of their Anglo American shares. The Revised
Proposal represents a price that is significantly above the broker median net asset value of
Anglo American excluding Anglo Platinum and Kumba, and the undisturbed equity value of
Anglo American on 23 April 2024, being the last trading day before the press speculation
about the Initial Proposal.
• The combination would bring together the strengths of BHP and Anglo American in an optimal
structure and unlock value for Anglo American shareholders. The combined group would
have a leading portfolio of large, low-cost, long-life Tier 1 assets focused on iron ore and
metallurgical coal and future facing commodities, including potash and copper. Anglo
American would bring its assets and long-term growth potential. BHP would bring its
operational capability and disciplined capital allocation to optimise the sequencing of growth
projects in order to maximise returns. BHP would have the financial strength and project
execution capability to advance the combined group's growth projects, while continuing its
commitment to shareholder returns.
• The combination would also deliver meaningful synergies across procurement, operations
and marketing, and through the BHP Operating System and sharing of best practice, which
would enhance profitability and value for Anglo American shareholders. BHP and Anglo
American's strong relationships with suppliers and BHP's global procurement model are
expected to deliver procurement synergies. BHP would also seek to optimise supply chains,
product blending, sales and logistics routes to create marketing synergies. Furthermore, the
proximity of various assets of the combined BHP and Anglo American group would allow for
operational synergies.
• The combined entity would retain BHP's global listings on the ASX, LSE, JSE and NYSE and
BHP has monthly share trading liquidity of approximately US$10 billion.
• The Revised Proposal would provide Anglo American shareholders with the benefits of
directly holding their interests in Anglo Platinum (78.6%), the world's leading platinum group
metals miner, and Kumba (69.7%) as shareholders, including enabling direct access to the
future value generation and dividends of Anglo Platinum and Kumba. Anglo Platinum and
Kumba each hold a portfolio of high quality assets which has delivered strong returns to their
shareholders. South Africa will continue to benefit from Anglo Platinum and Kumba as major
standalone South African mining companies and they would be better placed to reinvest in
South Africa. Under the proposed structure, shares for Anglo Platinum and Kumba would
continue to be listed on the Johannesburg Stock Exchange (JSE), a mature and highly liquid
exchange, and both companies would continue to be run by established South African based
management teams. BHP intends to maintain its listing on the JSE and is expected to
achieve a JSE index weighting of approximately 5% on completion.
Anglo American has a deep pool of talented people who would make a valuable contribution to the
successful operation of the combined group's assets. BHP believes the combination would also be
attractive to local communities and host governments. A combined BHP and Anglo American would
have greater financial strength which could support further development and investment in the
communities where the combined group operates.
Benefits to BHP shareholders
The benefits to BHP shareholders include:
• increasing BHP's exposure to future facing commodities through Anglo American's world
class copper assets and further aligning the portfolio to the global megatrends;
• complementing BHP's iron ore and metallurgical coal portfolios with Anglo American's high
quality iron ore operations in Brazil and metallurgical coal assets in Queensland, Australia;
• providing Anglo American's value adding copper growth options and increased geographic
diversification of its operating footprint; and
• delivering meaningful synergies and value through the combination.
Anglo American's other high quality businesses, including its diamond business, would be subject to a
strategic review post completion.
BHP is committed to its capital allocation framework and maintains a disciplined approach to mergers
and acquisitions.
UK Takeover Code
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.
As stated in the announcement made by Anglo American on 24 April 2024, in accordance with Rule
2.6(a) of the Code, BHP must, by not later than 5.00 p.m. on 22 May 2024, either announce a firm
intention to make an offer for Anglo American under Rule 2.7 of the Code or 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 (see below in Important Notices). This deadline can be extended with the
consent of the UK Panel on Takeovers and Mergers in accordance with Rule 2.6(c) of the Code.
Pursuant to Rule 2.5 of the Code, BHP reserves the right to vary the form and/or mix of the offer
consideration and vary the transaction structure (including in circumstances where Anglo American's
percentage holding of Anglo Platinum shares or Kumba shares is different from the relevant percentage
referred to above or the number of Anglo Platinum shares or Kumba shares held by Anglo American
changes after the time of this announcement). BHP also reserves the right:
• to amend the terms of any offer (including making the offer on less favourable terms and/or
at a lower value):
• with the agreement or consent of the Anglo American Board; or
• following the announcement by Anglo American of a Rule 9 waiver pursuant to the
Code; or
• if a third party announces a firm intention to make an offer for Anglo American at a
lower price and/or on less favourable terms than contemplated under the terms of
this proposed offer; or
• if the number of Anglo American shares to be acquired includes any shares held by
Tarl Investment Holdings Limited, Epoch Investment Holdings Limited, and/or Epoch
Two Investment Holdings (together the "Tarl and Epoch shares"), or any of the Tarl
and Epoch shares result in the issue of additional BHP shares as consideration or in
connection with the offer; and/or
• if Anglo American announces, declares, makes, or pays any dividend or any other distribution
or return of value to shareholders, to make an equivalent reduction to its proposed offer;
and/or
• to implement the proposed offer by means of a takeover offer as opposed to a scheme of
arrangement.
This announcement is being made by BHP without prior agreement or approval of Anglo American.
Footnotes
1. The number of fully diluted Anglo American shares assumed excludes shares held by Tarl
Investment Holdings Limited, Epoch Investment Holdings Limited, and Epoch Two Investment
Holdings. These shares total 112,300,129 as per the Rule 2.9 announcement by Anglo
American dated 25 April 2024.
2. Anglo American's unlisted assets comprises the entirety of the value implied for Anglo
American's assets and liabilities excluding its shareholdings in Anglo Platinum and Kumba
based on Anglo American's closing price less the closing prices of Anglo Platinum and Kumba
on 23 April 2024, being the last trading day prior to the press speculation about the Initial
Proposal.
3. The undisturbed value offered for Anglo American's unlisted assets is calculated based on BHP
closing prices and AUD:GBP FX rate as at 23 April 2024.
4. The spot value offered for Anglo American's unlisted assets is calculated based on BHP closing
prices as at 14 May 2024 (ASX closing) and AUD:GBP FX rate as at 14 May 2024.
5. Net asset value is based upon a median of the six brokers which disclose SOTP, including
Anglo Platinum and Kumba, alongside latest reported Anglo Platinum and Kumba net cash
balances as of 31 December 2023.
Authorised for release by Stefanie Wilkinson, Group Company Secretary.
Sponsor: J.P. Morgan Equities South Africa Proprietary Limited
BHP Group Limited ABN 49 004 028 077
Contacts
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Renata Fernandaz
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UBS (Joint Financial Adviser to BHP) +44 20 7567 8000 / +61 2 9324 3100
David Roberts
Sandip Dhillon
Calvin O'Shaughnessy
Campbell Stewart
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Philip Lindop
Adrian Beidas
Bruce Hart
Akshay Majithia
BHP Group Limited
ABN 49 004 028 07
LEI WZE1WSENV6JSZFK0JC28
Registered in Australia
Level 18, 171 Collins Street
Melbourne
Victoria 3000 Australia
Tel: +61 1300 55 4757 Fax: +61 3 9609 3015
BHP Group is headquartered in Australia
bhp.com
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.
If BHP makes a statement to which Rule 2.8 of the Code applies, then except with the consent of the
UK Panel on Takeovers and Mergers, unless circumstances occur that BHP specifies in its statement
as being circumstances in which the statement may be set aside, neither BHP, nor any person acting in
concert with BHP, nor any person who is subsequently acting in concert with either of them, may within
six months from the date of the statement:
• announce an offer or possible offer for Anglo American (including a partial offer which would
result in BHP and persons acting in concert with it being interested in shares carrying 30%
or more of the voting rights of Anglo American);
• acquire any interest of Anglo American if any such person would thereby become obliged
under Rule 9 of the Code to make an offer;
• acquire any interest in, or procure an irrevocable commitment in respect of, shares of Anglo
American if the shares in which such person, together with any persons acting in concert
with it, would be interested and the shares in respect of which it, or they, had acquired
irrevocable commitments would in aggregate carry 30% or more of the voting rights of Anglo
American;
• make any statement which raises or confirms the possibility that an offer might be made for
Anglo American;
• take any steps in connection with a possible offer for Anglo American where knowledge of
the possible offer might be extended outside those who need to know in BHP and its
immediate advisers; or
• purchase, agree to purchase, or make any statement which raises or confirms the possibility
that it is interested in purchasing assets which are significant in relation to Anglo American.
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 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.
Rule 2.9 of the Code
In accordance with Rule 2.9(c) of the Code, BHP confirms that as at the date of this announcement, it
has in issue 5,071,530,817 ordinary shares. There are no BHP Shares held in treasury. The
International Securities Identification Number (ISIN) of the shares is AU000000BHP4. BHP's Legal
Entity Identifier is WZE1WSENV6JSZFK0JC28.
BHP has a Level II sponsored ADR programme for which Citibank acts as Depositary. One ADR
represents two ordinary BHP shares. The BHP ADRs trade on the New York Stock Exchange. The
trading symbol for these securities is BHP, the CUSIP number is 088606108 and the ISIN is
US0886061086.
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.
BHP Group Limited ABN 49 004 028 077
Date: 13-05-2024 02:34:00
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