Should you buy BHP shares now before tonight's Anglo American takeover reveal?

ASX 200 investors should know tomorrow morning whether BHP will become the largest copper miner on Earth.

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BHP Group Ltd (ASX: BHP) shares are back in the green after opening lower this morning.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining giant closed flat yesterday trading for $45.08. In morning trade on Wednesday, shares are swapping hands for $45.13 apiece, up 0.1%.

For some context, the ASX 200 is down 0.8% at this same time.

BHP shares will be catching some headwinds from the 1.2% decline in iron ore prices overnight. The steel making metal dipped to US$117.90 per tonne amid resurgent concerns over Chinese demand.

But foremost on investors' minds today is tonight's deadline for the ASX 200 miner's $74 billion takeover proposal of Anglo American (LSE: AAL).

Following a one-week extension on the heels of the miner's third offer, BHP now has until 5pm London time today (overnight Aussie time) to commit to a deal or potentially request another extension.

Here's what's happening with BHP shares.

Will the third bid be a winner?

Investor focus homed in on BHP shares on 26 April when the miner made its first takeover bid for Anglo American.

BHP is primarily interested in Anglo's high-quality copper assets and, likely, its Queensland-based coal mines as well.

Copper prices hit record highs last week, having surged 29% over the past 12 months. The red metal is currently trading for US$10,502 per tonne, up from US$8,123 a year ago.

BHP is less interested in Anglo American's diamond businesses. And the ASX 200 miner has also flagged its intentions to divest Anglo's South African iron ore and platinum businesses.

Those divestments are complicating matters for Anglo's board. Anglo's management says the risk for its own shareholders is too high under the existing structure. Anglo's investors will be left holding shares in the divested companies, which are forecast to struggle if left to their own devices.

Although, Anglo American has also indicated its own significant restructuring plans. Those include multiple divestments, its Australian coal mines among them.

The Anglo American board also said BHP's initial offer undervalued the company's long-term potential, particularly with the strong demand growth forecast for copper.

This saw Anglo's board also reject BHP's second offer, made on 14 May and valued at some $64 billion.

The third, and likely final, bid came on 23 May. This current bid values Anglo American at a whopping $74 plus billion. BHP shares closed down 2.9% on the day the bid was revealed.

However, the third bid did earn BHP a one-week extension to engage in discussions with Anglo American, and BHP CEO Mike Henry has flown to London for face-to-face meetings.

Should I buy BHP shares now?

Most likely, we'll know at market open whether or not the $74 billion BHP deal has gone through or been permanently tabled. And BHP shares could make some big moves based on the outcome.

Unless, of course, the negotiations are extended.

That would require the green light from Anglo American. But according to anonymous sources cited by Bloomberg, any extension on negotiations is far from certain unless the two sides are already nearing a deal.

So, should I buy BHP shares now before the acquisition outcome is announced?

Well, Novus Capital's John Edwards has the ASX 200 miner as a 'hold' for now (courtesy of The Bull).

"The market is concerned BHP may be offering too much for Anglo American," Edwards said. "On the positive side, Anglo American has some of the best copper mines in the world."

Indeed, those are the two big concerns.

A successful $74 billion deal could see the ASX 200 miner come under short-term pressure.

However, with the global charge towards electrification showing no signs of slowing down, copper demand growth is widely forecast to see the red metal continue to trade at new all-time highs over the months and potentially years ahead. (Though there will certainly be some pullbacks along the way.)

So I think investors with a long-term horizon would do well to buy BHP shares ahead of the announcement, which could see BHP become the largest copper producer on Earth.

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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