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BHP GROUP LIMITED - Increased and Final Offer Ratio for Anglo American
2024/05/22 16:00:00Download PDF Stock report
Increased and Final Offer Ratio for Anglo American
BHP Group Limited
BHP Group Limited ABN 49 004 028 077
Registered in Australia
Registered Office: Level 18, 171 Collins Street Melbourne VIC 3000
Share code: BHG
ISIN: AU000000BHP4
Exchange release
22 May 2024
Increased and Final1 Offer Ratio 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 UK 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 RELEASE2
Increased and Final1 Offer Ratio by BHP
BHP Group Ltd (BHP) notes the announcement by Anglo American plc (Anglo American) regarding
the extension of the deadline for a BHP proposal (the Extension Announcement).
As stated in Anglo American's announcement of 24 April 2024, BHP was required to either announce
a firm intention to make an offer for Anglo American or announce that it does not intend to make an
offer by 5.00 p.m. (BST) on 22 May 2024. As set out in the Extension Announcement, the Board of
Anglo American requested an extension of the deadline under Rule 2.6(c) of the UK Code with the
consent of the UK Panel on Takeovers and Mergers (the Takeover Panel).
BHP confirms that on 20 May 2024 it submitted an increased and final offer ratio to the Board of
Directors of Anglo American as part of its proposal for a potential combination with Anglo American to
be effected by way of a scheme of arrangement. In putting forward the Final1 Offer Ratio (as defined
below), BHP has been guided by its capital allocation framework and its view of the fundamental value
of Anglo American and BHP.
The revised proposal follows BHP's initial proposal which was submitted to the Board of Anglo on 16
April 2024 (Initial Proposal) and BHP's second proposal which was submitted to the Board of Anglo
on 7 May 2024 (Second Proposal).
The transaction structure of the revised proposal remains the same as BHP's previous proposals and
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. Since the submission of the revised proposal, we have been engaging with Anglo
American and its advisors to help mitigate the concerns associated with the implementation of this
structure that led to the rejection of the revised proposal. We have made progress on these topics over
the course of the engagement so far, and we are hopeful that resolution will be reached in the next
seven days.
Under the extended deadline, BHP must either announce a firm intention to make an offer for Anglo
American in accordance with Rule 2.7 of the UK Code or announce that it does not intend to make an
offer for Anglo American, in which case the announcement will be treated as a statement to which Rule
2.8 of the UK Code applies, by no later than 5.00 p.m. (BST) on 29 May 2024 (the Revised Deadline).
The Revised Deadline can be extended with the consent of the Panel in accordance with Rule 2.6(c) of
the UK Code.
Structure of the proposal
Under the terms of the revised proposal, ordinary shareholders of Anglo American would receive:
• 0.8860 BHP shares for each ordinary share they own in Anglo American (BHP Share
Consideration), which represents Anglo American shareholders owning, in aggregate,
approximately 17.8% of the combined BHP and Anglo American group on completion of the
potential combination (the Final1 Offer Ratio); 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 Final Offer Ratio represents a total value of £31.11 per Anglo American share based on the closing
share prices of BHP as at 22 May 2024 and Anglo Platinum and Kumba as at 21 May 2024.
The Final Offer Ratio will not be increased, except that BHP reserves the right to increase and/or
otherwise improve the Final Offer Ratio if (i) there is an announcement on or after the date of this
announcement of an offer or possible offer (including a partial offer) for Anglo American by a third party
offeror(s) or potential offeror(s) (whether identified or not), (ii) the Board of Anglo American announces
that it recommends or is minded to recommend an offer on better terms than the Final Offer Ratio or
(iii) the Takeover Panel otherwise provides its consent.
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's other high quality businesses, including its diamond business, would be subject to a strategic
review post completion.
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.
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.
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.
Mike Henry, BHP Chief Executive Officer said:
'BHP has put forward a final offer ratio of 0.8860 BHP shares for each Anglo American share. This is a
significant increase from our first proposal and would provide Anglo American shareholders with 17.8%
of a combined BHP and Anglo American.
The revised proposal is underpinned by BHP's disciplined approach to mergers and acquisition and our
focus on delivering long term fundamental value.
BHP's revised proposal will offer immediate value for Anglo American shareholders and allow them to
benefit from the long-term value generation of the combined group.
BHP looks forward to engaging with the Board of Anglo American to explore this unique and compelling
opportunity to bring together two highly complementary, world class businesses.'
Value of the proposal
The terms of the proposal represent a total value, based on spot share prices and FX rates as at 22
May 2024 for BHP and 21 May 2024 for Anglo Platinum and Kumba, of approximately £31.11 per Anglo
American ordinary share including £5.40 in Anglo Platinum shares, £4.23 in Kumba shares and £21.48
per share for Anglo American's unlisted assets, valuing Anglo American's share capital at approximately
£38.6 billion, and implying a:
• 47% premium on the aggregate £ value per Anglo American ordinary share over the
undisturbed Anglo American share price (£21.11 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 assets of
approximately 67% (in £ per share, as at 23 April 2024);
• premium on the undisturbed market value of Anglo American's unlisted assets3 of
approximately 127% 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
• 56% premium to the broker median net asset value4 of Anglo American's unlisted assets.
The revised proposal represents an increase in the spot aggregate £ value per Anglo American ordinary
share over the Second Proposal (as announced on 13 May 2024) of 11.3%. The terms of the revised
proposal represent an increase over the Initial Proposal:
• of 24.8% in the merger exchange ratio5 and BHP Share Consideration; and
• 20.4% in Anglo American shareholders' aggregate ownership in the enlarged group (i.e.
increasing from c. 14.8% to c.17.8%).
The increase in the Final Offer Ratio reflects additional value from Anglo American's restructuring
proposal and cost plans. BHP believes that the Final Offer Ratio represents a compelling opportunity
for long term fundamental value-creation for both Anglo American and BHP shareholders.
UK Takeover Code
Pursuant to Rule 2.5 of the Code, BHP reserves the right:
• to make an offer on less favourable terms:
• 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
• to implement the proposed offer by means of a takeover offer as opposed to a scheme of
arrangement.
If Anglo American announces, declares, makes, or pays any dividend or any other distribution or return
of value to shareholders, Note 4 on Rule 2.5 of the Code applies.
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.
This announcement is being made by BHP without prior agreement or approval of Anglo American.
Footnotes
1. The Final Offer Ratio will not be increased, except that BHP reserves the right to increase
and/or otherwise improve the Final Offer Ratio if (i) there is an announcement on or after the
date of this announcement of an offer or possible offer (including a partial offer) for Anglo
American by a third party offeror(s) or potential offeror(s) (whether identified or not), (ii) the
Board of Anglo American announces that it recommends or is minded to recommend an offer
on better terms than the Final Offer Ratio or (iii) the Takeover Panel otherwise provides its
consent.
2. This release was made outside of the hours of operation of the ASX markets announcement
office.
3. 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.
4. 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.
5. Based on 0.8860 BHP shares for each ordinary share. 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.
6. Based on spot FX rates as at 21 May 2024 (AUD:GBP 0.5243; ZAR:GBP 0.0435).
Authorised for release by Stefanie Wilkinson, Group Company Secretary.
Sponsor: J.P. Morgan Equities South Africa Proprietary Limited
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.
Lazard & Co., Limited (Lazard), which is authorised and regulated in the United Kingdom by the Financial
Conduct Authority, is acting exclusively as financial adviser to 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 Lazard nor for providing advice in relation to the subject
matter or any other matters referred to in this announcement. Neither Lazard nor any of its affiliates
owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection
with this announcement, any statement contained herein or otherwise.
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.
Rule 9 waiver proposal and reverse takeover
A Rule 9 waiver proposal is where the Panel is asked to waive the obligation to make an offer under
Rule 9 of the UK Code which would otherwise arise where, as a result of the issue of new securities as
consideration for an acquisition or a cash subscription or in fulfilment of obligations under an agreement
to underwrite the issue of new securities, a person or group of persons acting in concert acquires an
interest, or interests, in shares which carry 30% or more of the voting rights of a company (to which the
UK Code applies).
A transaction will be a reverse takeover if an offeror (being a company to which the UK Code applies)
might as a result need to increase its existing issued voting equity share capital by more than 100%.
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.
Contacts
Media Investor Relations
media.relations@bhp.com investor.relations@bhp.com
Australia and Asia Australia and Asia
Gabrielle Notley John-Paul Santamaria
+61 411 071 715 +61 499 006 018
Europe, Middle East and Africa Europe, Middle East and Africa
Neil Burrows James Bell
+44 7786 661 683 +44 7961 636 432
Americas Americas
Megan Hjulfors Monica Nettleton
+1 (403) 605-2314 +1 (416) 518-6293
Renata Fernandaz
+56 9 8229 5357
UBS (Joint Lead Financial Adviser to BHP) +44 20 7567 8000 / +61 2 9324 3100
David Roberts
Sandip Dhillon
Calvin O'Shaughnessy
Campbell Stewart
Barclays (Joint Lead Financial Adviser to BHP) +44 20 7623 2323 / +27 (0) 10 0051303
Philip Lindop
Adrian Beidas
Bruce Hart
Akshay Majithia
Lazard (Financial Adviser to BHP) +44 20 7187 2000
Cyrus Kapadia
Spiro Youakim
Gustavo Plenge
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
Date: 22-05-2024 04:00:00
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