BHP Group
Limited
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.
Contacts
|
Media
media.relations@bhp.com
|
Investor Relations
investor.relations@bhp.com
|
Australia and
Asia
Gabrielle Notley
+61 411 071 715
|
Australia and
Asia
John-Paul Santamaria
+61 499 006 018
|
Europe, Middle East and Africa
Neil Burrows
+44 7786 661 683
|
Europe, Middle East and Africa
James Bell
+44 7961 636 432
|
Americas
Megan Hjulfors
+1 (403) 605-2314
Renata Fernandaz
+56 9 8229 5357
|
Americas
Monica Nettleton
+1 (416) 518-6293
|
UBS
(Joint Financial Adviser to BHP)
David Roberts
Sandip Dhillon
Calvin O'Shaughnessy
Campbell Stewart
|
+44 20 7567 8000 /
+61 2 9324 3100
|
Barclays (Joint Financial Adviser to BHP)
Philip Lindop
Adrian Beidas
Bruce Hart
Akshay Majithia
|
+44 20 7623 2323 / +27 (0) 10
0051303
|
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.