BHP ends takeover pursuit of Anglo American

BHP Plc (LSE:BHP) has ended its takeover pursuit of Anglo American Plc (LSE:AAL) after the proposal failed to secure the backing of Anglo’s board.

It comes just hours after Anglo’s management declined to extend today’s deadline for BHP’s bid.

BHP confirmed, in a statement just before Wednesday’s market close in London, that it will now not make a firm offer to buy its London mining peer.

“While we believed that our proposal for Anglo American was a compelling opportunity to effectively grow the pie of value for both sets of shareholders, we were unable to reach agreement with Anglo American on our specific views in respect of South African regulatory risk and cost and, despite seeking to engage constructively and numerous requests, we were not able to access from Anglo American key information required to formulate measures to address the excess risk they perceive,” BHP chief executive Mike Henry said.

“We remain of the view that our proposal was the most effective structure to deliver value for Anglo American shareholders, and we are confident that, working together with Anglo American, we could have obtained all required regulatory approvals, including in South Africa."

Anglo, which continually spurned all advances from BHP, previously called the takeover approach “opportunistic” and said there were “disproportionate execution risks” in the proposed takeover structure.

BHP’s third approach for AAL came earlier this month, with the deal price pitched at £29.34 plus certain concessions that included a potential 'reverse break fee' and other perks for existing AAL shareholders including a distribution of share in a spin-off of certain assets into a new company.