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Investing.com - Anglo American PLC (LON:AAL) has refused BHP Group's (ASX:BHP) last-minute appeal for an extended time to discuss a potential $74 billion takeover bid. The company deemed the proposal highly complex, making it likely that BHP Group's five-week pursuit has ended.
BHP said in a statement “While we believed that our proposal for Anglo American was a compelling opportunity to effectively grow the pie of value for both sets of shareholders, we were unable to reach agreement with Anglo American on our specific views in respect of South African regulatory risk and cost.”
Previously, Anglo had granted BHP a one-week extension until 2 am AEST on Wednesday to submit a binding offer. This extension followed Anglo's rejection of a third takeover proposal from BHP, which Anglo considered challenging to execute.
BHP Group Ltd (LON:BHPB) shares remained unchanged at $45.08 on Wednesday, while Anglo's shares fell marginally by 0.7% to $45 (or £25.39) by 9:15 GMT.
Anglo had agreed to negotiate with BHP to address concerns over the structure of the proposed deal. One of the primary issues was BHP's condition that Anglo should spin off its South African platinum and iron ore divisions before the takeover.
BHP had earlier expressed the need for more time to engage with Anglo and had outlined commitments to reduce regulatory risk in South Africa. These commitments encompassed job security for South African employees and an assurance from BHP that it would cover the costs associated with increased employee ownership in South Africa, which is expected to be a requirement in any demerger.
However, Anglo, in its statement, criticized BHP for its unwillingness to amend its proposed structure to assume the risks associated with the complex structure of the deal, despite BHP's insistence that these risks were not significant.
