BHP’s decision to go public with its pitch to solve Anglo American’s South African problems is a move designed to win an extension between the two mining giants.
Already a subscriber?BHP chief executive Mike Henry and his team are pulling out every trick in the book to get theWith the clock running down on this bid – the one-week extension for the parties to reach an agreement expires on Wednesday night in London – BHP publicly turned up the heat on the Anglo American board by making public the suite of sweeteners it has offered to win South African government approval for the deal.
But the biggest kicker? BHP is so confident in its position that it says it is “willing to discuss an appropriate reverse break fee, payable by BHP” if it can’t get the necessary competition and regulatory approvals, including in South Africa. Chanticleer would argue the message to BHP investors is also clear. BHP’s statement shows that it is the deal’s structure, and not value, that is the key sticking point.
This remains a tricky deal for BHP to pull off. Remember, it is buying a bunch of assets that it doesn’t want – including Anglo American’s manganese, diamonds, nickel and potash businesses – to get to the copper and Queensland metallurgical coal assets that it really desires.
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