BHP’s Increased Anglo American Proposal Is Beginning to Look Expensive

No-moat BHP has lobbed an increased proposal to buy no-moat Anglo American in an all-share transaction via a scheme of arrangement. Under the updated proposal, Anglo American shareholders would receive 0.8132 BHP shares for each Anglo American share they hold, 15% higher than they would have received under the original proposal that Anglo rejected. (See our note 'BHP Lobs All-Share Proposal for Anglo American; Shareholders Take No Action.') However, Anglo also rejected BHP’s updated proposal. All other conditions of the proposal remain the same, including being conditional on Anglo American first demerging and distributing its 78.6% shareholding in Anglo American Platinum, its platinum group metals business, and 69.7% shareholding in Kumba Iron Ore to its shareholders.