Anglo American (AAL.L) is facing increasing pressure from shareholders to detail its plans for improving the company’s value, as it seeks to fend off a potential takeover bid from mining giant BHP (BHP.AX).
BHP, the world’s biggest listed mining group, is reportedly in private talks with investors about a potential revised bid for Anglo, after an initial $39 billion offer was rejected by the company last week. Meanwhile, activist investor Elliott Investment Management has further increased its stake in Anglo, now holding 2.6% of the company.
Shareholders are urging Anglo to explain how it plans to make its business more valuable, particularly in light of BHP’s approach. One investor, George Cheveley of Ninety-One, said the company needs to “come out and explain to us how they’re going to make this business more valuable,” arguing that BHP’s initial bid was “a credible approach” that Anglo may be able to improve upon.
Much of the focus of BHP’s potential bid has been on Anglo’s copper assets and their long-term price prospects, which are seen as central to the world’s clean energy transition. Some investors have indicated they would be open to BHP raising its offer, provided the terms are more favorable.
BHP’s adviser, UBS, has also begun scheduling meetings with fund managers this week, as the mining giant seeks to fine-tune a revised proposal for Anglo. These discussions aim to gain detailed feedback from shareholders on how a second bid should be structured.
However, Anglo is limited in its ability to discuss specific plans for improving the company’s value, due to restrictions in the UK Takeover Code. The company is expected to reiterate its rejection of BHP’s initial offer at its annual general meeting on Tuesday.
The pressure is mounting on Anglo to demonstrate how it can create more value for shareholders, as it seeks to fend off the unwanted advances of its larger rival BHP.