Extract AUST Business today: ANGLO BUYOUT ‘NOW MORE LIKELY’...

Extract AUST Business today:
ANGLO BUYOUT ‘NOW MORE LIKELY’
analysts tip deal as target gives bhp more time to make offer
Nick Evans - Mohammad Alfares
A deal between BHP and Anglo American is growing more likely after Anglo’s board agreed to push back the deadline for a formal offer, analysts say, as Anglo dropped its complaint that BHP’s all-scrip bid undervalues its assets.
But the two companies are still locked in a standoff over deal structure, after Anglo rejected BHP’s “final” offer overnight on Wednesday, in which Anglo shareholders would emerge with 17.8 per cent of the merged group, or 0.8860 BHP shares for each Anglo share on issue.
Anglo chairman Stuart Chambers again reiterated the company’s rejection of BHP’s deal structure, which would require Anglo to organise the divestment of its South African iron ore and platinum group assets ahead of any deal with BHP.
However, in a key sign a deal could be on the cards, Anglo dropped its previous criticism that BHP’s bid undervalued the company.
Although Mr Chambers opened the door for a deal to be thrashed out, pushing back the deadline for BHP to make a formal offer until May 29 as the two companies spoke directly about the offer for the first time this week, BHP is still signalling it will not budge further on price or its deal structure.
The standoff is likely to set the scene for further extensions to Britain’s so-called “put up or shut up” deadline, as the two mining majors look for a path to a deal that satisfies the concerns of both sides.
BHP, led by chief executive Mike Henry, said in its statement to the British market that it would not raise its offer ratio further unless a third party joined the race to capture Anglo and its prized South American copper assets.
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Asked if he was upset over the higher offer, Mr Argus said he was not surprised. “Whenever you do these deals there are different scenarios,” he said. “BHP needs to consider what their balance sheets would look like with different assets and revenue streams.” BHP closed down 2.9 per cent, or $1.33, at $44.91.