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Investors Worry About Asset Cherry-Picking as BHP Considers Firm Bid for Anglo

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BHP Group Faces Resistance from Anglo American Investors Over Takeover Bid

Investors in Anglo American are pushing back against BHP Group’s proposed takeover bid, citing concerns over potential losses and uncertainties surrounding the deal. BHP’s initial $39 billion offer, which included a 31% premium on Anglo’s implied value, was rejected by Anglo last week.

One of the main points of contention is BHP’s proposal for Anglo to sell its shares in South African subsidiaries, including Anglo Platinum (Amplats) and Kumba Iron Ore, as part of the deal. This move could leave Anglo investors holding onto assets that may take a long time to close, with the process of de-merging South African assets potentially taking up to 18 months.

There are also concerns about the impact on Amplats and Kumba’s share prices if the units were demerged, as some shareholders may not be able to hold onto these stocks due to their location in South Africa. This could result in significant selling pressure on the shares.

Investors are urging BHP to make a clean offer or consider buying the entire company instead of cherry-picking assets. They believe that the current bid places all the risk on Anglo shareholders and that BHP should take responsibility for any potential complications that may arise from the deal.

With BHP having until May 22 to submit a binding offer, investors are anticipating that the company may need to sweeten its bid to address the concerns raised by Anglo investors. The outcome of this takeover bid will have significant implications for both companies and the broader mining industry.

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