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Today, May 22, is the final day BHP can increase its offer for Anglo American under UK takeover regulations.

I, like many other business and resources reporters, are watching the clock, waiting for news.

While we’re heading toward the home stretch of trade here on the ASX, it’s not yet dawn in the UK, where Anglo is listed – so there are still many hours left for BHP to take one last swing by 5pm London time.

👷 In case you haven’t been across this, let me catch you up. 👷

In April, Anglo American (Anglo from here on) revealed BHP (aka the worlds biggest miner, aka ‘The Big Australian’) lobbed an unsolicited offer for a bunch of Anglo’s assets.

(Starting the clock on a 28 day deadline under the UK Takeovers Code.)

BHP is mostly interested in Anglo’s copper, metallurgical coal (used to make steel, not as an energy source to power homes)  iron ore and potash assets.

(It isn’t so keen on Anglo’s De Beers diamond mines, its other South African assets, and few other bits and bobs).

So BHP’s offer, which valued Anglo at $US39bn ($60bn AUD) was contingent that Anglo sell the parts of the business it didn’t want.

Anglo in effect said, no thanks, we’re worth more than that.

On May 13, BHP upped its offer to $US43bn ($64.4bn AUD)

BHP also offered two spots on its board.

At the time, BHP CEO Mike Henry said:

“The revised proposal represents a 15% increase in the merger exchange ratio and increases Anglo American shareholders’ aggregate ownership in the combined group to 16.6% from 14.8% in BHP’s first proposal.

BHP and Anglo American are a strategic fit and the combination is a unique and compelling opportunity to unlock significant synergies by bringing together two highly complementary, world class businesses. The combined business would have a leading portfolio of high-quality assets in copper, potash, iron ore and metallurgical coal and BHP would bring its track record of operational excellence to maximise returns from these high-quality assets.”

Anglo again declined the offer, repeating it ‘significantly undervalues Anglo American and its future prospects’.

The next day,  Anglo announced it would divest the company, in effect selling off the poorer performing assets (i.e. the ones BHP doesn’t want so much) – and form a new, higher performing business.

Now here we hare, the clock is ticking down, and we wait to see BHP’s next move.

Anglo can extend the May 22 deadline if it wants.

If 5pm passes in London later today and BHP doesn’t make another offer, it can re-enter the race in six months time.

Whatever happens in the coming hours, I have a strong feeling this story does not end today.


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