Shares of BHP Group BHP.AX touched a three-month high on Tuesday, about 36 hours ahead of a deadline to lodge a formal bid for rival miner Anglo American AAL.L. Last week, Anglo American rejected BHP’s sweetened $43 billion takeover proposal.
The world’s largest listed miner’s shares are benefiting from positive factors, including fresh stimulus for China’s property sector, copper prices reaching record highs, and a growing view that BHP will not make another attempt to acquire Anglo. Andy Forster, senior investment officer at Argo Investments, a BHP shareholder, said, “I think they’re going to stay disciplined. I’d be surprised if they’d come back at this late stage given the lukewarm response from Anglo’s board to the previous offers.”
Under UK takeover rules, BHP has until 1600 GMT on Wednesday to make a binding bid for Anglo American or it will be forced to walk away for at least six months. If the companies reach an agreement in the meantime, an extension can be granted.
Anglo’s board has already rejected two all-share proposals from BHP as inadequate and too difficult to execute. Last week, Anglo unveiled plans for a break-up to focus on energy transition metal copper while spinning out or selling its coal, nickel, diamond, and platinum businesses.
The copper assets make strategic sense for BHP, but the longer the deal takes to close, the more likely it is that a competitor may make a rival bid for some of Anglo’s assets, according to Hayden Bairstow, an analyst at Australian stockbroker Argonaut.