By Christian Moess Laursen


Australian mining giant BHP said a further deadline extension is needed before it can reach an agreement with Anglo American on a $50 billion takeover of its London-based rival.

BHP, the world's largest miner by market cap, on Wednesday outlined a range of measures aimed at addressing Anglo's concerns about the structure of the proposed deal.

Last week, Anglo rebuffed BHP's latest bid--its third--as it deemed the deal too complex, echoing the reason behind the previous two dismissals. The offer valued Anglo at $49.87 billion.

BHP's offer proposes the spin off of Anglo's South African units Anglo American Platinum and Kumba Iron Ore--a condition that Anglo said has significant execution risks.

Among the proposed measures outlined Wednesday, the two units would retain listings in Johannesburg and be run by South Africa-based management teams. Headcount at Anglo's Johannesburg office would be maintained.

It also committed to build a training facility in South Africa and promote the country as a mining destination, as well as support local procurement.

BHP said it was confident these measures--which would be kept for at least three years--resolve Anglo's concerns, and would support South African regulatory approvals. The integration challenges are quantifiable and manageable, and the costs associated with them have already been factored into the offer, it said.

However, while the measures should ease concerns about some of the risks embedded in the deal structure, BHP didn't specify the cost associated with them, making it difficult to assess the value included in its offer, RBC Capital Markets analyst Marina Calero said in a note to clients.

"Anglo is unlikely to accept last week's offer unless the structure changes or a higher compensation is offered," Calero said.

The London-based miner has so far said it favored its prospects as a standalone company. To fend off BHP, it accelerated a business overhaul to break itself up.

BHP said Wednesday that it believes its proposed measures would provide greater economic benefits to South Africa than Anglo's planned restructure.

BHP is open to discuss paying a termination fee if the deal fails to achieve necessary antitrust and regulatory approvals, it said.

Anglo American didn't immediately respond to a request for comment.

BHP has until 1700 London time to commit to a bid or walk away under U.K. takeover panel rules, while Anglo has until that same deadline to request an extension.

At 0812 GMT, BHP's London shares were up 1.1% at GBP23.60, while Anglo's traded 1.0% down at GBP25.32.


Write to Christian Moess Laursen at christian.moess@wsj.com


(END) Dow Jones Newswires

05-29-24 0428ET