BHP Group
Limited
Exchange
release
22 May
2024
Increased and
Final1 Offer Ratio for 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 UK CITY CODE ON TAKEOVERS AND MERGERS (THE
UK 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
RELEASE2
Increased and Final1 Offer Ratio by BHP
BHP Group Ltd (BHP) notes the announcement by Anglo
American plc (Anglo
American) regarding the extension of the deadline for a BHP
proposal (the Extension
Announcement).
As stated in Anglo American's
announcement of 24 April 2024, BHP was required to either announce
a firm intention to make an offer for Anglo American or announce
that it does not intend to make an offer by 5.00 p.m. (BST) on 22
May 2024. As set out in the Extension Announcement, the Board of
Anglo American requested an extension of the deadline under Rule
2.6(c) of the UK Code with the consent of the UK Panel on Takeovers
and Mergers (the Takeover
Panel).
BHP confirms that on
20 May 2024 it submitted
an increased and final offer ratio to the Board of Directors of
Anglo American as part of its proposal for a potential combination
with Anglo American to be effected by way of a scheme of
arrangement. In putting forward the Final1 Offer Ratio (as defined
below), BHP has been guided by its capital allocation framework and
its view of the fundamental value of Anglo American and
BHP.
The revised proposal follows BHP's
initial proposal which was submitted to the Board of Anglo on 16
April 2024 (Initial
Proposal) and BHP's second proposal which was submitted to
the Board of Anglo on 7 May 2024 (Second Proposal).
The transaction structure of the
revised proposal remains the same as BHP's previous proposals and
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 immediately before completion of the scheme of
arrangement. Since the submission of the revised proposal, we have
been engaging with Anglo American and its advisors to help mitigate
the concerns associated with the implementation of this structure
that led to the rejection of the revised proposal. We have made
progress on these topics over the course of the engagement so far,
and we are hopeful that resolution will be reached in the next
seven days.
Under the extended deadline, BHP
must either announce a firm intention to make an offer for Anglo
American in accordance with Rule 2.7 of the UK Code or announce
that it does not intend to make an offer for Anglo American, in
which case the announcement will be treated as a statement to which
Rule 2.8 of the UK Code applies, by no later than 5.00 p.m. (BST)
on 29 May 2024 (the
Revised Deadline). The
Revised Deadline can be extended with the consent of the Panel in
accordance with Rule 2.6(c) of the UK Code.
Structure of the proposal
Under the terms of the revised
proposal, ordinary shareholders of Anglo American would
receive:
· 0.8860
BHP shares for each ordinary share they own in
Anglo American (BHP Share
Consideration), which represents Anglo American shareholders
owning, in aggregate, approximately 17.8% of the combined BHP and Anglo
American group on completion of the potential combination (the
Final1 Offer Ratio); and
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· 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).
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The Final Offer Ratio
represents a total value of £31.11 per
Anglo American share based on the closing share prices of
BHP
as at 22 May 2024
and Anglo Platinum and
Kumba as at
21 May
2024.
The Final Offer Ratio
will not be increased, except that BHP reserves the right to
increase and/or otherwise improve the Final Offer Ratio if (i)
there is an announcement on or after the date of this announcement
of an offer or possible offer (including a partial offer) for Anglo
American by a third party offeror(s) or potential offeror(s)
(whether identified or not), (ii) the Board of Anglo American
announces that it recommends or is minded to recommend an offer on
better terms than the Final Offer Ratio or (iii) the Takeover Panel
otherwise provides its consent.
The combined group
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. Anglo American's
other high quality businesses, including its diamond business,
would be subject to a strategic review post completion.
BHP is committed to a
combination that leverages the best of both BHP and Anglo American
and intends to offer Anglo American up to two positions on the
Board of the combined entity.
BHP will work closely
and constructively with competition regulators and provide the
information they need to assess the potential transaction. BHP is
confident that it can obtain all required regulatory approvals and
consummate a transaction that benefits customers
globally.
The revised 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.
Mike Henry, BHP Chief Executive Officer
said:
"BHP has put forward a final offer ratio of 0.8860 BHP shares for each Anglo
American share. This is a significant increase from our first
proposal and would provide Anglo American shareholders
with 17.8% of a combined BHP and Anglo American.
The revised proposal is underpinned by BHP's disciplined
approach to mergers and acquisition and our focus on delivering
long term fundamental value.
BHP's revised proposal will offer immediate value for Anglo
American shareholders and allow them to benefit from the long-term
value generation of the combined group.
BHP looks forward to engaging with the Board of Anglo American
to explore this unique and compelling opportunity to bring together
two highly complementary, world class
businesses."
Value of the proposal
The terms of the proposal represent
a total value, based on spot share prices and FX rates6 as at 22 May 2024
for BHP and 21 May 2024 for Anglo Platinum and Kumba, of
approximately £31.11 per Anglo American ordinary share including
£5.40 in Anglo
Platinum shares, £4.23 in Kumba shares and £21.48 per share for Anglo American's
unlisted assets, valuing Anglo American's share capital at
approximately £38.6
billion, and implying a:
· 47% premium on the aggregate £ value
per Anglo American ordinary share over the undisturbed Anglo
American share price (£21.11 as at 23 April 2024, being the last
trading day before the press speculation about the Initial
Proposal);
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· premium on the undisturbed market value of Anglo American's
unlisted assets of approximately 67% (in £ per share, as at 23
April 2024);
· premium on the undisturbed market value of Anglo American's
unlisted assets3 of approximately 127% based on 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
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· 56% premium to the broker median net
asset value4 of Anglo American's unlisted assets.
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The revised proposal represents an
increase in the spot aggregate £ value per Anglo American ordinary
share over the Second Proposal (as announced on 13 May 2024)
of 11.3%. The terms
of the revised proposal represent an increase over the Initial
Proposal:
· of 24.8% in the merger exchange
ratio5 and BHP
Share Consideration; and
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· 20.4%
in Anglo American shareholders' aggregate ownership in the enlarged
group (i.e. increasing from c. 14.8% to c.17.8%).
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The increase in the Final Offer
Ratio reflects additional value from Anglo American's restructuring
proposal and cost plans. BHP believes that the Final Offer Ratio
represents a compelling opportunity for long term fundamental
value-creation for both Anglo American and BHP
shareholders.
UK
Takeover Code
Pursuant to Rule 2.5 of the Code,
BHP reserves the right:
· to
make an offer on less favourable terms:
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· with
the agreement or consent of the Anglo American Board; or
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· following the announcement by Anglo American of a Rule 9
waiver pursuant to the Code; or
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· 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; or
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· if the
number of Anglo American shares to be acquired includes any shares
held by Tarl Investment Holdings Limited,
Epoch Investment Holdings Limited, and/or Epoch Two Investment
Holdings (together the "Tarl and Epoch shares"), or any of the Tarl
and Epoch shares result in the issue of additional BHP shares as
consideration or in connection with the offer; and/or
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· to
implement the proposed offer by means of a takeover offer as
opposed to a scheme of arrangement.
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If Anglo American announces,
declares, makes, or pays any dividend or any other distribution or
return of value to shareholders, Note 4 on Rule 2.5 of the Code
applies.
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.
This announcement is being made by
BHP without prior agreement or approval of Anglo
American.
Footnotes
1. The Final Offer Ratio will not be increased, except that BHP
reserves the right to increase and/or otherwise improve the Final
Offer Ratio if (i) there is an announcement on or after the date of
this announcement of an offer or possible offer (including a
partial offer) for Anglo American by a third party offeror(s) or
potential offeror(s) (whether identified or not), (ii) the Board of
Anglo American announces that it recommends or is minded to
recommend an offer on better terms than the Final Offer Ratio or
(iii) the Takeover Panel otherwise provides its consent.
2. This release was made
outside of the hours of operation of the ASX markets announcement
office.
3. Anglo American's unlisted assets comprises the entirety of the
value implied for Anglo American's assets and liabilities excluding
its shareholdings in Anglo Platinum and Kumba based on Anglo
American's closing price less the closing prices of Anglo Platinum
and Kumba on 23 April 2024, being the last trading day prior to the
press speculation about the Initial Proposal.
4. 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.
5. Based on 0.8860 BHP shares for each ordinary share. 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. These shares total 112,300,129 as
per the Rule 2.9 announcement by Anglo American dated 25 April
2024.
6. Based on spot FX rates as at 21 May 2024 (AUD:GBP 0.5243;
ZAR:GBP 0.0435).
Authorised for release by Stefanie
Wilkinson, Group Company Secretary.
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.
Lazard & Co., Limited (Lazard),
which is authorised and regulated in the United Kingdom by the
Financial Conduct Authority, is acting exclusively as financial
adviser to 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
Lazard nor for providing advice in relation to the subject matter
or any other matters referred to in this announcement. Neither
Lazard nor any of its affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Lazard in connection with this
announcement, any statement contained herein or
otherwise.
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);
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· acquire
any interest of Anglo American if any such person would thereby
become obliged under Rule 9 of the Code to make an
offer;
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· 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;
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· make
any statement which raises or confirms the possibility that an
offer might be made for Anglo American;
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· 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
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·
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.
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Rule 9 waiver proposal and reverse takeover
A Rule 9 waiver proposal is where
the Panel is asked to waive the obligation to make an offer under
Rule 9 of the UK Code which would otherwise arise where, as a
result of the issue of new securities as consideration for an
acquisition or a cash subscription or in fulfilment of obligations
under an agreement to underwrite the issue of new securities, a
person or group of persons acting in concert acquires an interest,
or interests, in shares which carry 30% or more of the voting
rights of a company (to which the UK Code
applies).
A transaction will be a reverse
takeover if an offeror (being a company to which the UK Code
applies) might as a result need to increase its existing issued
voting equity share capital by more than 100%.
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 of the Code
In accordance with Rule 2.9(c) of
the Code, BHP confirms that as at the date of this announcement, it
has in issue 5,071,530,817
ordinary shares. There are no BHP Shares held in
treasury. The International Securities Identification Number (ISIN)
of the shares is AU000000BHP4. BHP's Legal Entity Identifier is
WZE1WSENV6JSZFK0JC28.
BHP has a Level II sponsored ADR
programme for which Citibank acts as Depositary. One ADR represents
two ordinary BHP shares. The BHP ADRs trade on the New York Stock
Exchange. The trading symbol for these securities is BHP, the CUSIP
number is 088606108 and the ISIN is US0886061086.
Disclosure requirements of the UK 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.
Contacts
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Media
media.relations@bhp.com
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Investor Relations
investor.relations@bhp.com
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Australia and
Asia
Gabrielle Notley
+61 411 071 715
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Australia and
Asia
John-Paul Santamaria
+61 499 006 018
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Europe, Middle East and Africa
Neil Burrows
+44 7786 661 683
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Europe, Middle East and Africa
James Bell
+44 7961 636 432
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Americas
Megan Hjulfors
+1 (403) 605-2314
Renata Fernandaz
+56 9 8229 5357
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Americas
Monica Nettleton
+1 (416) 518-6293
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UBS
(Joint Lead Financial Adviser to BHP)
David Roberts
Sandip Dhillon
Calvin O'Shaughnessy
Campbell Stewart
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+44 20 7567 8000 /
+61 2 9324 3100
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Barclays (Joint Lead Financial Adviser to
BHP)
Philip Lindop
Adrian Beidas
Bruce Hart
Akshay Majithia
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+44 20 7623 2323 / +27 (0) 10
0051303
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Lazard (Financial Adviser to BHP)
Cyrus Kapadia
Spiro Youakim
Gustavo Plenge
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+44 20 7187 2000
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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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