BHP share price slides amid no deal on 'compelling opportunity'

BHP's Mike Henry responded to Anglo American's rejection of the improved takeover deal.

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The BHP Group Ltd (ASX: BHP) share price is in the red today.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining giant closed yesterday trading for $43.25. In morning trade on Tuesday, shares are swapping hands for $43.07 apiece, down 0.4%.

For some context, the ASX 200 is down 0.1% at this same time.

This comes as investors digest the news that BHP returned with an improved takeover offer for Anglo American (LSE: AAL) last week. And that the sweetened offer was rejected by Anglo American's board overnight.

Here's what's happening.

BHP share price slips as sweetened takeover deal rebuffed

As a quick recap, BHP announced it had made a non-binding offer to acquire Anglo American on 26 April for an all scrip offer valued at approximately AU$60 billion.

Interestingly, the BHP share price closed down 4.6% on the day.

BHP is looking to expand its copper footprint. And copper represents 30% of Anglo American's total production. If BHP were to acquire Anglo, it would become the world's top copper producer.

Anglo American's board rejected BHP's offer on 29 April, with chairman Stuart Chambers saying the bid significantly undervalued the company and its growth potential.

Which brings us to the improved offer from BHP, which values the copper miner at 34 billion pounds (AU$64 billion).

But the Anglo board clearly feels this remains too little.

Commenting on the improved takeover offer, Chambers said, "The latest proposal from BHP again fails to recognise the value inherent in Anglo American."

Mike Henry responds

This morning BHP responded to the rejection of its improved offer, stating, "BHP continues to believe that a combination of the two businesses would deliver significant value for all shareholders."

Commenting on the rejection that's seeing the BHP share price dip this morning, CEO Mike Henry said, "BHP put forward a revised proposal to the Anglo American Board that we strongly believe would be a win-win for BHP and Anglo American shareholders. We are disappointed that this second proposal has been rejected."

Henry added:

BHP and Anglo American are a strategic fit and the combination is a unique and compelling opportunity to unlock significant synergies by bringing together two highly complementary, world class businesses.

The combined business would have a leading portfolio of high-quality assets in copper, potash, iron ore and metallurgical coal and BHP would bring its track record of operational excellence to maximise returns from these high-quality assets…

The combination is consistent with BHP's strategy and the revised proposal is underpinned by a focus on delivering long term fundamental value.

The BHP share price is down 15% so far in 2024.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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