BHP's options for Anglo American deal narrow as deadline looms
BHP Group's for its pursuit of rival miner Anglo American include sweetening its US$42.7 billion buyout offer, making a hostile bid or walking away for now as it approaches a May 22 deadline to lodge a binding offer.
As BHP weighs its next move, CEO Mike Henry and his team have been making the case for the mega-deal on the sidelines of an investor conference in Miami and elsewhere to its investors, a large proportion of whom also hold shares in Anglo.
"At this stage I think it is up to BHP to try to convince enough of Anglo's institutional shareholders over the coming week that it's worthwhile pressuring their board to engage with BHP, with a potentially even higher offer on the table should this occur," Morningstar analyst Jon Mills said.
Anglo's board has already knocked back two all-share proposals from BHP as inadequate and too difficult to execute and on Tuesday unveiled plans for a break-up to focus on energy transition metal copper while spinning out or selling its less profitable coal, nickel, diamond and platinum businesses.
That plan met with a mildly supportive response from Anglo investors, who said it provided a strategy but was short on details.
With the exception of Anglo keeping its South African iron ore assets and selling its Australian coal mines, it was also similar to BHP's own plans for its takeover target.
"It would seem to me that they (Anglo) need to demonstrate why the bird in the hand is not better than two in the bush," Anglo investor Todd Warren at Tribeca Investment Partners said.
That plan met with a mildly supportive response from Anglo investors, who said it provided a strategy but was short on details.
With the exception of Anglo keeping its South African iron ore assets and selling its Australian coal mines, it was also similar to BHP's own plans for its takeover target.
"It would seem to me that they (Anglo) need to demonstrate why the bird in the hand is not better than two in the bush," Anglo investor Todd Warren at Tribeca Investment Partners said.
Swiss commodities group Glencore is studying a possible rival bid for Anglo, Reuters reported this month.
"We retain our view that interloper risk remains high," JPMorgan analyst Lyndon Fagan wrote in a note published on Tuesday before Anglo's restructure was announced.
Rio Tinto CEO Jakob Stausholm said on Tuesday that his company was not afraid of merger and acquisition, but it had strong organic growth options.
BHP, Anglo, Glencore and Rio Tinto declined to comment on Wednesday.
As BHP weighs its next move, CEO Mike Henry and his team have been making the case for the mega-deal on the sidelines of an investor conference in Miami and elsewhere to its investors, a large proportion of whom also hold shares in Anglo.
"At this stage I think it is up to BHP to try to convince enough of Anglo's institutional shareholders over the coming week that it's worthwhile pressuring their board to engage with BHP, with a potentially even higher offer on the table should this occur," Morningstar analyst Jon Mills said.
Anglo's board has already knocked back two all-share proposals from BHP as inadequate and too difficult to execute and on Tuesday unveiled plans for a break-up to focus on energy transition metal copper while spinning out or selling its less profitable coal, nickel, diamond and platinum businesses.
That plan met with a mildly supportive response from Anglo investors, who said it provided a strategy but was short on details.
With the exception of Anglo keeping its South African iron ore assets and selling its Australian coal mines, it was also similar to BHP's own plans for its takeover target.
"It would seem to me that they (Anglo) need to demonstrate why the bird in the hand is not better than two in the bush," Anglo investor Todd Warren at Tribeca Investment Partners said.
That plan met with a mildly supportive response from Anglo investors, who said it provided a strategy but was short on details.
With the exception of Anglo keeping its South African iron ore assets and selling its Australian coal mines, it was also similar to BHP's own plans for its takeover target.
"It would seem to me that they (Anglo) need to demonstrate why the bird in the hand is not better than two in the bush," Anglo investor Todd Warren at Tribeca Investment Partners said.
Swiss commodities group Glencore is studying a possible rival bid for Anglo, Reuters reported this month.
"We retain our view that interloper risk remains high," JPMorgan analyst Lyndon Fagan wrote in a note published on Tuesday before Anglo's restructure was announced.
Rio Tinto CEO Jakob Stausholm said on Tuesday that his company was not afraid of merger and acquisition, but it had strong organic growth options.
BHP, Anglo, Glencore and Rio Tinto declined to comment on Wednesday.
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