BHP Group
Limited
Exchange release
25 April
2024
Response to
announcement by Anglo American plc
NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF THAT JURISDICTION
THIS ANNOUNCEMENT IS AN ANNOUNCEMENT
UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE
"CODE") AND IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN
OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO CERTAINTY THAT
AN OFFER WILL BE MADE
THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION
FOR IMMEDIATE RELEASE
BHP Group Ltd ("BHP") notes the announcement by Anglo
American plc ("Anglo
American") in response to recent press speculation regarding
a proposal by BHP for a potential combination with Anglo
American.
BHP confirms that on 16 April 2024
it made a proposal to the Board of Directors of Anglo American
regarding a potential combination to be effected by way of a scheme
of arrangement. BHP's proposal comprises an all-share offer for
Anglo American subject to the pro-rata distribution by Anglo
American of its entire shareholdings in Anglo American Platinum Ltd
("Anglo Platinum") and
Kumba Iron Ore Ltd ("Kumba") to Anglo American shareholders
before completion ("Proposal").
Under the terms of the Proposal,
ordinary shareholders of Anglo American would receive:
· 0.7097
BHP shares for each ordinary share in Anglo American;
and
· ordinary shares in
Anglo Platinum and Kumba (which would be distributed by Anglo
American to its shareholders in direct proportion to each
shareholder's effective interest in Anglo Platinum and
Kumba).
The terms of the Proposal would,
based on closing market prices as at 23 April 2024, being the last
trading day prior to press speculation, represent:
· a total value
of approximately £25.08 per Anglo American ordinary
share1 including £4.86 in Anglo Platinum shares and
£3.40 in Kumba shares, valuing Anglo American's share capital at
£31.1 billion;
· a
premium on the implied market value of Anglo American's unlisted
assets2 of approximately 31 per cent;
· a
premium on the implied market value of Anglo American's unlisted
assets2 of approximately 78 per
cent. to the volume weighted average closing price of Anglo
American's shares (adjusted for the attributable volume weighted
average closing prices of Anglo Platinum and Kumba) in the 90
trading days prior to and including 23 April 2024; and
· a 19%
premium to the broker median net asset value of Anglo American
excluding Anglo Platinum and Kumba of USD21.8
billion1,3.
The Proposal is non-binding and
subject to customary conditions including completion of due
diligence to the satisfaction of BHP. Anglo American has been
offered reciprocal due diligence on BHP.
In addition to allowing Anglo
American shareholders to realise an immediate and substantial
premium over the current value of their Anglo American shares, the
combination would deliver further ongoing value for Anglo American
shareholders.
· The
combination would bring together the strengths of BHP and Anglo
American in an optimal structure. Anglo American would
bring its assets and long-term growth potential.
BHP would bring its higher margin cash
generative assets and growth projects along
with its larger free cash flows and stronger balance
sheet.
· The
combined entity would have a leading
portfolio of large, low-cost, long-life Tier 1
assets focused on iron ore and metallurgical coal and future facing
commodities, including potash and copper. These would be expected to generate significant cash flows
and the combined entity would have the financial capacity to support value adding
growth projects at the optimal time, while
continuing BHP's commitment to shareholder returns.
· The combination
would also deliver
meaningful synergies, including from sharing best practice,
creating procurement, operational and
marketing synergies and eliminating
duplication, which
would enhance profitability and value for Anglo American
shareholders.
· The
combined entity would retain BHP's global listings on the ASX,
LSE, JSE and NYSE and Anglo American shareholders would
be able to benefit
from the BHP's
monthly share trading liquidity of approximately US$10
billion.
· The
Proposal would provide Anglo American shareholders with the
benefits of directly holding their interests in Anglo Platinum
(78.6%), the world's leading PGM miner, and Kumba (69.7%) as
shareholders, including enabling direct access to the future value
generation and dividends of Anglo Platinum and Kumba. Additionally,
Anglo American shareholders would gain the ability
to calibrate their relative exposures and determine their optimal
shareholding levels in Anglo Platinum and Kumba.
The combination is consistent with
BHP's strategy including its focus on long term fundamental value
and its capital allocation framework and would be attractive to
BHP's shareholders. The benefits to BHP shareholders would
include:
· increasing BHP's exposure to future
facing commodities through Anglo American's world class copper
assets;
· complementing BHP's iron ore and
metallurgical coal portfolios with Anglo American's high quality
iron ore operations in Brazil and metallurgical coal assets in
Queensland, Australia;
· providing
Anglo American's value adding copper growth
options and increased geographic diversification of operating footprint;
and
· delivering meaningful synergies.
Anglo American's other high quality
operations including its diamond business would be subject to a
strategic review post completion.
In addition, Anglo American has a
deep pool of talented people who would continue to make a valuable
contribution to the successful operation of Anglo American's assets
within the combined group. BHP also believes the combination would
also be attractive to communities where greater financial strength
could support further development.
BHP is committed to its capital
allocation framework and maintains a disciplined approach to
mergers and acquisitions.
This announcement does not amount to
a firm intention to make an offer and there can be no certainty
that an offer will be made. There is no certainty that any form of
agreement or transaction will be reached or
concluded.
As stated in the announcement made
by Anglo American on 24 April 2024, in accordance with Rule 2.6(a)
of the Code, BHP must, by not later than 5.00 p.m. on 22 May 2024,
either announce a firm intention to make an offer for Anglo
American under Rule 2.7 of the Code or announce that it does not
intend to make an offer, in which case the announcement will be
treated as a statement to which Rule 2.8 of the Code applies (see
below in Important Notices). This deadline can be extended with the
consent of the UK Panel on Takeovers and Mergers in accordance with
Rule 2.6(c) of the Code.
Pursuant to Rule 2.5 of the Code,
BHP reserves the right to vary the form and/or mix of the offer
consideration and vary the transaction structure. BHP also reserves
the right:
· to
amend the terms of any offer (including making the offer on less
favourable terms and/or at a lower value):
· with
the agreement or consent of the Anglo American Board; or
· following the announcement by Anglo American of a Rule 9
waiver pursuant to the Code; or
· if a
third party announces a firm intention to make an offer for Anglo
American at a lower price and/or on less favourable terms than
contemplated under the terms of this proposed offer;
and/or
· if
Anglo American announces, declares, makes, or pays any dividend or
any other distribution or return of value to shareholders, to make
an equivalent reduction to its proposed offer; and/or
· to
implement the proposed offer by means of a takeover offer as
opposed to a scheme of arrangement.
This announcement is being made by
BHP without prior agreement or approval of Anglo
American.
Footnotes
1. The number of fully diluted
Anglo American shares assumed excludes shares held by Tarl
Investment Holdings Limited, Epoch Investment Holdings Limited, and
Epoch Two Investment Holdings.
2. Anglo American's unlisted
assets comprises the entirety of Anglo American's assets excluding
its shareholdings in Anglo Platinum and Kumba. The premia are based on the value of
BHP's share consideration offered versus Anglo American's share
price less Anglo Platinum's and Kumba's attributable share
prices.
3. Net asset value is
based upon a median of the six brokers which disclose SOTP,
including Anglo Platinum and Kumba, alongside latest reported Anglo
Platinum and Kumba net cash balances as of 31 December
2023.
Authorised for release by Stefanie
Wilkinson, Group Company
Secretary.
Contacts
|
Media
media.relations@bhp.com
|
Investor Relations
investor.relations@bhp.com
|
Australia and
Asia
Gabrielle Notley
+61 411 071 715
|
Australia and
Asia
John-Paul Santamaria
+61 499 006 018
|
Europe, Middle East and Africa
Neil Burrows
+44 7786 661 683
|
Europe, Middle East and Africa
James Bell
+44 7961 636 432
|
Americas
Megan Hjulfors
+1 (403) 605-2314
Renata Fernandaz
+56 9 8229 5357
|
Americas
Monica Nettleton
+1 (416) 518-6293
|
UBS
(Joint Financial Adviser to BHP)
David Roberts
Sandip Dhillon
Calvin O'Shaughnessy
Campbell Stewart
|
+44 20 7567 8000 /
+61 2 9324 3100
|
Barclays (Joint Financial Adviser to BHP)
Philip Lindop
Adrian Beidas
Bruce Hart
Akshay Majithia
|
+44 20 7623 2323 / +27 (0) 10
0051303
|
BHP
Group Limited
ABN 49 004 028 07
LEI WZE1WSENV6JSZFK0JC28
Registered in Australia
Level 18, 171 Collins Street
Melbourne
Victoria 3000 Australia
Tel: +61 1300 55 4757 Fax: +61 3 9609 3015
BHP Group is headquartered in Australia
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bhp.com
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Important Notices
Barclays Bank PLC, acting through
its Investment Bank ("Barclays"), which is authorised by the
Prudential Regulation Authority and regulated in the United Kingdom
by the Financial Conduct Authority and the Prudential Regulation
Authority, is acting exclusively for BHP and no one else in
connection with the subject matter of this announcement and will
not be responsible to anyone other than BHP for providing the
protections afforded to clients of Barclays nor for providing
advice in relation to the subject matter of this
announcement.
UBS AG London Branch is authorised
and regulated by the Financial Market Supervisory Authority in
Switzerland. It is authorised by the Prudential Regulation
Authority (the "PRA") and subject to regulation by the FCA and
limited regulation by the PRA in the United Kingdom. UBS AG London
Branch and UBS AG Australia Branch (together, "UBS") provided
financial advice to BHP and no one else in connection with the
process or contents of this announcement. In connection with such
matters, UBS will not regard any other person as its client, nor
will it be responsible to any other person for providing the
protections afforded to its clients or for providing advice in
relation to the process, contents of this announcement or any other
matter referred to herein.
If BHP makes a statement to which
Rule 2.8 of the Code applies, then except with the consent of the
UK Panel on Takeovers and Mergers, unless circumstances occur that
BHP specifies in its statement as being circumstances in which the
statement may be set aside, neither BHP, nor any person acting in
concert with BHP, nor any person who is subsequently acting in
concert with either of them, may within six months from the date of
the statement:
· announce an offer or possible offer for Anglo American
(including a partial offer which would result in BHP and persons
acting in concert with it being interested in shares carrying 30%
or more of the voting rights of Anglo American);
· acquire any interest of Anglo American if any such person
would thereby become obliged under Rule 9 of the Code to make an
offer;
· acquire
any interest in, or procure an irrevocable commitment in respect
of, shares of Anglo American if the shares in which such person,
together with any persons acting in concert with it, would be
interested and the shares in respect of which it, or they, had
acquired irrevocable commitments would in aggregate carry 30% or
more of the voting rights of Anglo American;
· make
any statement which raises or confirms the possibility that an
offer might be made for Anglo American;
· take
any steps in connection with a possible offer for Anglo American
where knowledge of the possible offer might be extended outside
those who need to know in BHP and its immediate advisers;
or
· purchase,
agree to purchase, or make any statement which raises or confirms
the possibility that it is interested in purchasing assets which
are significant in relation to Anglo American.
Publication on a website
In accordance with Rule 26.1 of the
Code, a copy of this announcement will be available at
https://www.bhp.com promptly and in any event by no later than 12 noon (UK time)
on the business day following this announcement. The content of the
website referred to in this announcement is not incorporated into
and does not form part of this announcement.
Rule 2.9
In accordance with Rule 2.9 of the
Code, BHP confirms that as at the date of this announcement, it has
in issue 5,071,530,817 ordinary shares. The International
Securities Identification Number (ISIN) of the shares is
AU000000BHP.
BHP is not aware of any dealings in
Anglo American shares that would require a minimum level, or
particular form, of consideration that it would be obliged to offer
under Rule 6 or Rule 11 of the Code (as appropriate). However, it
has not been practicable to make such enquiries of all persons
presumed to be acting in concert with BHP. To the extent that any
such details are identified, BHP will make an announcement as soon
as practicable, and in any event by the time it is required to make
its Opening Position Disclosure pursuant to Rule 8.1 of the
Code
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Code, any
person who is interested in 1% or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the offer period and, if later, following the
announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any
person who is, or becomes, interested in 1% or more of any class of
relevant securities of the offeree company or of any securities
exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain
details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror, save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure
by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 pm (London time) on the business day following the date
of the relevant dealing.
If two or more persons act together
pursuant to an agreement or understanding, whether formal or
informal, to acquire or control an interest in relevant securities
of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule
8.3.
Opening Position Disclosures must
also be made by the offeree company and by any offeror and Dealing
Disclosures must also be made by the offeree company, by any
offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror
companies in respect of whose relevant securities Opening Position
Disclosures and Dealing Disclosures must be made can be found in
the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and
when any offeror was first identified. You should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure.