Anglo American Rejects BHP's $39 Billion Takeover Bid

The proposed Anglo American-BHP operation, which would have created a global copper giant, has been aborted. The London-based miner rejected the $39 billion takeover bid on Friday, deeming it opportunistic and undervaluing its prospects. The board of directors believed the offer would significantly dilute the value of Anglo American shares relative to BHP shareholders.

Some BHP investors are not convinced of the operation's merits, and the rejection may force BHP to offer more to convince shareholders and management, potentially creating unnecessary animosity. The transaction is complicated due to Anglo American's complex South African assets, with a revenue of $43 billion.

Elliott Management's Stake in Anglo American

Meanwhile, it has emerged that Elliott Management has accumulated a $1 billion stake in Anglo American over the past few months. As copper plays a crucial role in the global transition to clean energy, used in electric vehicles and wind turbines, there is potential for the company to create more value in the coming months and years. The investment fund has significant experience with mining companies, including BHP. The activist investor has urged the company to spin off its petroleum business and abandon its primary listing in Australia in favor of a London listing. BHP initially rejected these proposals, only to divest from petroleum activities four years later.

Challenges Ahead

Elliott's presence may not necessarily facilitate the transaction. Moreover, even if it does, antitrust concerns cannot be overlooked. Industry sources citing regulators from BHP's major clients, including China for copper, Japan and India for metallurgical coal, highlight potential obstacles to the operation.