25 April 2024
If you are covering BHP’s proposed takeover of Anglo American, pleased find a comment below from Jamie Maddock, energy analyst at Quilter Cheviot:
“Following this morning’s blockbuster news that BHP has initiated informal discussions with Anglo American for a potential all-share offer at £25 per share, the market is clearly expecting this attempt to be rebuffed. The fact that the shares are trading just above what BHP is offering suggests one of two things – either BHP is going to up its offer or sweeten the deal in some way, or a second offer comes forward from another diversified miner like Glencore.
“The deal premium feels relatively low, particularly in the context of recent M&A offers and the heightened complexity hence something above £30 per share could be likely to get it done.
“This is a complex and potentially political deal, as well as being another blow to the London market. Given the unusual complexity and sensitivity it wouldn’t be a complete surprise to see the deal fall away. However, in-light of industry’s interest to acquire what is an under-valued asset, the pressure on management to be more active to close the obvious valuation discount will only increase. Even today, following the share price recovery it still trades at an unusually wide discount to its fair value.”
