Proactive Investors - Anglo American (JO:AGLJ) has rejected BHP Group (LON:BHPB)'s 'opportunistic' £31 billion all-stock bid, saying it significantly undervalues its business, condemning the transaction as 'complex' and 'uncertain'.
BHP's interest is Anglo's copper operations in Peru and Chile, with the Aussie giant looking to offload the iron ore and platinum operations.
Anglo's chairman, Stuart Chambers, in a statement on Friday said he and the board didn't want to 'dilute the upside' from the copper operation by selling out at this stage and for what on the face of it appears a paltry/opportunistic sum.
"With copper representing 30% of Anglo American's total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products, the board believes that Anglo American's shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materialises," Chambers said.
Analysts and City commentators believe BHP's approach is only the opening salvo in the battle for control of the business and the fact the share price has rocketed past BHP's indicative offer suggests that others may enter the fray.
And. in rejecting the deal, Anglo has the backing of a growing cohort of institutional investors led by Legal & General and Abrdn.
Chambers in a statement, told investors: "The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders.
"Anglo American has defined clear strategic priorities - of operational excellence, portfolio, and growth - to deliver full value potential and is entirely focused on that delivery."
The group's rejection of a proposed takeover by BHP comes just as copper prices soared to two-year highs.
The price of the metal lifted above US$10,000 for the first time in around 24 months, having risen by 1.4% on the London Metal Exchange since April 2022.
It means copper prices now sit 17% higher than at the start of 2024, with the commodity a vital metal used in the production of EVs and renewable tech.
Updated to add details on copper prices