BHPLF - Anglo American: Assessing BHP Group's Proposal

2024-04-25 14:15:23 ET

Summary

• Our analysis of BHP Group Limited's Anglo American plc takeover offer paints two pictures.
• We think the price offered presents solid multiples, which would at least attract the interest of Anglo's board and shareholders.
• However, public sector and civil society influence could stall proceedings. Moreover, a large Anglo American investor has stated its dissatisfaction with the offer.
• Reports of a De Beers sale comes as no surprise, given the Botswana government's push for control of Debswana.
• The market's reaction tells us a merger arbitrage opportunity has left the building; therefore, we urge caution.

"Patience, and the mulberry leaf becomes a silk gown." - Chinese Proverb.

BHP Group Limited ( BHP , BHPLF) has shocked the mining world by moving to acquire Anglo American plc ( AAUKF ) Now, many of you might ask what the quote at the top of the page has to do with the topic at hand. Well, the quote is partially because it is the end of the month, and I feel animated. However, it also speaks volumes in this instance, as mining M&A activity is a complex phenomenon, meaning those who rush into trading such events could get burned.

This article discusses matters from Anglo American's perspective, not BHP Group's. However, both sets of investors will likely find value in the analysis. ...

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