The BHP share price crushed the benchmark in May. Here's how

ASX investors sent the BHP share price sharply higher in May. But why?

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The BHP Group Ltd (ASX: BHP) share price just closed out a surprisingly strong month.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining giant finished off April trading for $43.03. When the closing bell rang on Friday 31 May, shares were changing hands for $44.51 apiece.

That saw the BHP share price up 3.4% in May, racing ahead of the 0.5% monthly gain posted by the ASX 200.

Here's what happened in the month just gone.

What moved the BHP share price in May?

Setting aside the elephant in the room for the moment, the BHP share price received some support in May from a fairly resilient iron ore market, with the steel-making metal trading in the US$116 to US$118 per tonne range for most of the month.

And copper, BHP's second biggest revenue earner after iron ore, continued to outshine in May. After hitting all-time highs on 20 May, the copper price ended the month up 3% at US$10,040 per tonne.

The demand outlook for both industrial metals received a boost mid-month as the Chinese government announced fresh moves to stimulate the nation's sluggish economy and struggling, steel-hungry property markets. Those included the sale of 1 trillion yuan of bonds intended to increase infrastructure spending.

Which brings us back to the elephant in the room, BHP's three failed bids to acquire global miner Anglo American (LSE: AAL).

Investors shrug off takeover rejection

The BHP share price alternately moved higher or lower amid fresh news over the month on the ASX 200 miner's takeover efforts of Anglo American.

BHP's acquisition of some of Anglo's prized assets, most notably its copper mines, would likely have lifted its fortunes over the medium to longer-term. But over the shorter-term many investors were concerned over the hefty price tag, along with BHP's plans to divest a number of Anglo's South African platinum and iron assets.

As it turns out, those concerns were unwarranted, and BHP's efforts eventually came to naught.

As you're likely aware, BHP made its first bid for Anglo American on 26 April. That was swiftly rejected by Anglo's board.

In May, BHP twice sweetened its offer, which reached approximately $74 billion on the third bid.

But those too were rejected by Anglo's board, which remained concerned over the complicated structure of the deal and maintained the offer undervalued Anglo American's long-term growth prospects.

On 30 May, following Anglo's rejection of that third bid, BHP CEO Mike Henry closed the door on any further negotiations. At least for now.

"BHP will not be making a firm offer for Anglo American," he said.

As for June, the BHP share price is starting the new month off with a bang, up 1.3% at $45.08 a share.

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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