BHP’s chief executive Mike Henry recently held meetings with government officials in South Africa, sparking speculation that the Australian mining company may reignite its previously unsuccessful £39 billion bid to acquire the Johannesburg-based Anglo American.
Henry, along with BHP’s chief development officer Catherine Raw, engaged in talks with South African government representatives and the Public Investment Corporation (PIC), the nation’s state-owned asset manager, as confirmed by three individuals familiar with the discussions. Raw, who joined BHP in April, oversees mergers and acquisitions and played a role in the initial approach to Anglo. PIC is Anglo’s second-largest shareholder, holding a 7.5% stake, while the South African government also holds a 3.7% stake in BHP.
According to banking sources looking to secure advisory or financing roles, BHP is assessing the possibility of making a renewed offer once the standstill period concludes on November 29. These sources, however, emphasized that no definitive decisions have been made.
Speculation is rife among bankers that BHP is poised to make another attempt, contingent on finding a feasible approach. The discussions have become an “open secret” within the financial community. Despite this, BHP has declined to comment on the matter.
Earlier, on May 29, BHP halted a six-week pursuit of the UK-listed Anglo, initiating a mandatory six-month cooling-off period during which it could not propose another bid. Since then, BHP has stated that it has moved on from the Anglo deal and is now concentrating on organic growth strategies.
For BHP, acquiring Anglo would solidify its position as a leading copper producer and bolster Mike Henry’s legacy as CEO, nearly five years into his tenure. Timing is crucial for such a potential bid, according to bankers. As part of its defense strategy against a takeover, Anglo has embarked on a major restructuring, selling off four significant business segments to become a focused producer of copper and iron ore.
An insider suggested that BHP is unlikely to proceed with a bid before these disposals are finalized, as the company aims to avoid acquiring Anglo’s South African platinum mines and the De Beers diamond businesses currently on sale. However, delaying the acquisition until after the disposals could allow rival bidders to enter the fray. “Once Anglo’s management completes the cleanup, they will be an easy target,” remarked the CEO of a leading mining firm.
BHP’s initial proposal, which required Anglo to demerge its South African iron ore and platinum operations, ignited political controversy in South Africa. In September, BHP’s chief financial officer Vandita Pant expressed confidence in having walked away from Anglo, citing the company’s adherence to stringent financial discipline.
BHP ranks as the world’s second-largest copper producer by consolidated volume. According to UK takeover regulations, BHP must wait six months before announcing another potential bid for Anglo or taking specific actions towards such a proposal. However, this restriction could be lifted if a competing bidder surfaces.
Anglo American has declined to comment on these developments. Additional reporting was contributed by Rob Rose in Johannesburg, Tom Wilson in London, and Nic Fildes in Sydney.