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BHP has urged Anglo American to extend takeover talks as the world’s largest miner presses ahead with an increasingly fractious attempt to buy its smaller rival for £39bn.
Under UK takeover rules, the Sydney-based company faces a deadline of 5pm UK time on Wednesday to make an offer for Anglo or walk away.
The companies have been in talks since May 22 in an effort to find an agreement on the structure of the deal. BHP’s three approaches had all required Anglo to spin off its two South African businesses — a demand that angered the government in Pretoria and Anglo strongly opposed.
In a statement on Wednesday, BHP said “a further extension of the deadline is required to allow for further engagement on its proposal”.
The Melbourne-based miner said the risks associated with its takeover plan were “quantifiable and manageable” and the costs of the planned measures had already been built into its offer.
“BHP is confident that the measures it has proposed to the board of Anglo American provide a viable pathway to resolve the matters raised by Anglo American and would support South African regulatory approvals,” it said.
The statement increases pressure on Anglo’s board, which has set out an alternative plan to break up its business but maintain its independence, to respond to BHP’s measures that until now have been proposed during negotiations.
“BHP is clearly appealing to target shareholders to put pressure on Anglo’s board to grant them an extension — it is clear that they think in the absence of this the transaction will fall apart later today,” said Mark Kelly, chief executive at MKP Advisors.
BHP’s proposal includes maintaining Anglo’s Johannesburg office at current staffing levels, listing BHP shares in South Africa and sharing in the cost of increased South African employee ownership of the two units, if required. It said it would maintain these measures for at least three years.
Anglo said: “We will respond to BHP’s request in due course”.
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