Anglo American has rejected a request from BHP to extend a takeover deadline today in a move that could blow apart the potential mining mega-merger.
After BHP requested an extension to the bid this morning, Anglo responded that the firm had failed to address its concerns over the deal and would, therefore, deny the extension.
“Throughout the engagements with BHP, BHP continues to restate its belief that the risks of its complex structure are not material, yet has repeatedly and consistently stated both publicly and during the engagements that it is unwilling to amend its proposed structure to assume these risks,” Anglo American said.
BHP now has until 5pm to table a firm offer for the firm or walk away for at least six months under UK takeover rules.
The move could be the final nail in the coffin in takeover talks after weeks of hand-wringing over the structure of a deal. The main obstacle to talks progressing has been a condition that the London-listed miner sell its Kumba operation in South Africa, where it employs some 40,000 people.
Suggestions of the move have unsettled South Africa’s Public Investment Corporation, Anglo’s biggest shareholder, with a stake of around 24 per cent.
BHP’s latest £39bn for Anglo American was rejected last Wednesday but the Aussie-listed group pledged a series of investment intitiatives this morning designed to assuage the fears of the South African government over the impact of the deal.
Among the pledges are a “Mining Centre of Excellence” to support research and development and “promotion of South Africa as a premier mining destination” and a three-year promise to maintain the current employment levels at Anglo American’s Johannesburg office.
“BHP is confident that the measures it has proposed to the Board of Anglo American provide a viable pathway to resolve the matters raised by Anglo American and would support South African regulatory approvals,” the firm said in a statement.
BHP claimed its promises would provide greater economic benefits to South Africa than Anglo American’s Accelerating Value Delivery plan, which the latter group outlined shortly after BHP’s initial approach.
As BHP has rounded with three bids for the company, Anglo has been canvassing support from shareholders for its own break-up plan that will see it sell or demerge its 85 per cent stake in its mining operation De Beers and platinum business Amplats.