BHP share price marching higher amid fast approaching $75 billion takeover deadline

BHP is still in negotiations over its acquisition proposal for Anglo American.

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The BHP Group Ltd (ASX: BHP) share price is marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining giant closed on Friday trading for $44.64. In morning trade on Monday, shares are swapping hands for $44.96 apiece, up 0.7%.

That compares to a 0.6% gain on the ASX 200 at this time.

And it's handily outpacing the 0.5% loss posted by Fortescue Metals Group Ltd (ASX: FMG) shares and the 0.7% loss of Rio Tinto Ltd (ASX: RIO) shares, both of which are slipping despite a 0.8% bump in the iron ore price to US$120.40 per tonne.

The BHP share price may be outperforming its rivals as investors eye the looming deadline for the ASX 200 miner's $75 billion takeover proposal of Anglo American (LSE: AAL).

Three miners looking at a tablet.

Image source: Getty Images

Takeover deadline fast approaching

Unless you've just emerged from four weeks hiding under a rock, you're probably aware of BHP's acquisition goals of UK-listed Anglo American.

The BHP share price initially came under pressure when the first takeover bid was announced on 26 April.

With global copper demand surging and forecast to remain strong, sending the red metal to record highs last week, BHP is primarily interested in Anglo's portfolio of high-quality copper assets. Although the miner's Queensland-based coal mines are also on the agenda.

Complicating matters, BHP's takeover proposal involves divesting a number of Anglo American's assets, including its South African iron ore and platinum businesses and likely its diamond projects.

Labelling the deal as too complex and undervaluing its growth potential, Anglo's board rejected BHP's initial offer.

And the board swiftly rejected its second offer, lobbed on 14 May and valuing the miner around $64 billion, as well.

Enter the third bid, made on 23 May, which now values Anglo American at some $75 billion.

That bid earned BHP a one-week deadline extension under British legislation to negotiate with Anglo's board and make a binding offer. The new deadline is this Wednesday, 29 May.

"BHP looks forward to engaging with the board of Anglo American to explore this unique and compelling opportunity to bring together two highly complementary, world class businesses," Henry said on Thursday, when the BHP share price closed the day down 2.9%.

According to Liberum Capital research analyst Ben Davis (quoted by The Australian Financial Review), BHP could still increase its offer price.

However, Davis noted, "We are at a level where shareholders are increasingly vocal on capital discipline."

Davis added:

They have clearly got bored of bidding against themselves in a vacuum and have said they will not be increasing this offer any further … except in the situation of Anglo or an interloper coming up with a new acceptable number.

The BHP share price is up 4% over the past 12 months.

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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