BHP: Elevated and closingprovide ratio for Anglo American

Issued on behalf of BHP Team Ltd

BHP Team Ltd (BHP) notes the announcement by Anglo American plc (Anglo American) in terms of the extension of the cut-off date for a BHP proposal (theExtension Announcement).

As acknowledged in Anglo American’s announcement of 24 April 2024, BHP became once required to both inform a agency scheme to accomplish an provide for Anglo American or inform that it would not intend to accomplish an provide by 5.00 p.m. (BST) on 22 Might perhaps 2024. As scheme out within the Extension Announcement, the Board of Anglo American requested an extension of the cut-off date below Rule 2.6(c) of the UK Code with the consent of the UK Panel on Takeovers and Mergers (theTakeover Panel).

BHP confirms that on 20 Might perhaps 2024 it submitted an elevated and closing provide ratio to the Board of Administrators of Anglo American as half of its proposal for a possible aggregate with Anglo American to be effected by scheme of a design of scheme. In inserting forward the Closing¹Provide Ratio (as defined below), BHP has been guided by its capital allocation framework and its see of the predominant cost of Anglo American and BHP.

The revised proposal follows BHP’s initial proposal which became once submitted to the Board of Anglo on 16 April 2024 (Initial Proposal) and BHP’s second proposal which became once submitted to the Board of Anglo on 7 Might perhaps 2024 (Second Proposal).

The transaction construction of the revised proposal stays the an identical as BHP’s previous proposals and contains an all-fragment provide for Anglo American self-discipline to the first fee-rata distribution by Anglo American of its entire shareholdings in Anglo American Platinum Ltd (English Platinum) and Kumba Iron Ore Ltd (At home) to Anglo American shareholders straight sooner than completion of the design of scheme. Since the submission of the revised proposal, we contain been enticing with Anglo American and its advisors to aid mitigate the concerns associated with the implementation of this construction that resulted in the rejection of the revised proposal. We contain made development on these topics over the direction of the engagement up to now, and we are hopeful that resolution will possible be reached within the next seven days.

Below the prolonged cut-off date, BHP ought to both inform a agency scheme to accomplish an provide for Anglo American in response to Rule 2.7 of the UK Code or inform that it would not intend to accomplish an provide for Anglo American, wherein case the announcement will possible 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 Might perhaps 2024 (theRevised Time restrict). The Revised Time restrict will possible be prolonged with the consent of the Panel in response to Rule 2.6(c) of the UK Code.

Constructing of the proposal

Below the terms of the revised proposal, customary shareholders of Anglo American would receive:

0.8860 BHP shares for every customary fragment they win in Anglo American (BHP Half Consideration), which represents Anglo American shareholders proudly owning, in aggregate, roughly 17.8% of the mixed BHP and Anglo American group on completion of the aptitude aggregate (theClosing¹Provide an Account); and
customary shares in Anglo Platinum and Kumba (which might perhaps be distributed by Anglo American to its shareholders in narrate proportion to every shareholder’s effective interest in Anglo Platinum and Kumba).

The Closing Provide Ratio represents a total cost of £31.11 per Anglo American fragment in response to the closing fragment costs of BHP as at 22 Might perhaps 2024 and Anglo Platinum and Kumba as at 21 Might perhaps 2024.

The Closing Provide Ratio might perhaps well perhaps perhaps not be elevated, moreover that BHP reserves the factual to amplify and/or otherwise reinforce the Closing Provide Ratio if (i) there might perhaps be an announcement on or after the date of this announcement of an provide or that that you just might perhaps well perhaps possible additionally mediate of provide (alongside with a partial provide) for Anglo American by a third birthday party offeror(s) or possible offeror(s) (whether or not identified or not), (ii) the Board of Anglo American announces that it recommends or is minded to counsel an provide on better terms than the Closing Provide Ratio or (iii) the Takeover Panel otherwise provides its consent.

The mixed group would contain a leading portfolio of tremendous, low-cost, prolonged-life Tier 1 sources infected by iron ore and metallurgical coal and future going thru commodities, alongside with potash and copper. Anglo American’s diversified prime quality companies, alongside with its diamond industry, can be self-discipline to a strategic evaluation post completion.

BHP is committed to a aggregate that leverages the finest of both BHP and Anglo American and intends to give Anglo American as much as two positions on the Board of the mixed entity.

BHP will work closely and constructively with competition regulators and provide the data they favor to evaluate the aptitude transaction. BHP is confident that it must accomplish all required regulatory approvals and consummate a transaction that advantages customers globally.

The revised proposal is non-binding and self-discipline to previous prerequisites alongside with completion of due diligence to the pride of BHP. Anglo American has been equipped reciprocal due diligence on BHP.

Mike Henry, BHP Chief Executive Officer said:

“BHP has advocate a closing provide ratio of 0.8860BHP shares for every Anglo American fragment. Here’s a fundamental amplify from our first proposal and would provide Anglo American shareholders with17.8% of a mixed BHP and Anglo American.

The revised proposal is underpinned by BHP’s disciplined skill to mergers and acquisition and our specialize in turning in prolonged time length predominant cost.

BHP’s revised proposal will provide instantaneous cost for Anglo American shareholders and enable them to clutch pleasure within the prolonged-time length cost generation of the mixed group.

BHP appears to be like forward to enticing with the Board of Anglo American to stumble on this uncommon and compelling different to ship together two highly complementary, world class companies.”

Fee of the proposal

The terms of the proposal portray a total cost, in response to explain fragment costs and FX rates⁶as at 22 Might perhaps 2024 for BHP and 21 Might perhaps 2024 for Anglo Platinum and Kumba, of roughly £31.11 per Anglo American customary fragment alongside with £5.40 in Anglo Platinum shares, £4.23 in Kumba shares and £21.forty eight per fragment for Anglo American’s unlisted sources, valuing Anglo American’s fragment capital at roughly £38.6 billion, and implying a:

47% top fee on the combination £ cost per Anglo American customary fragment over the undisturbed Anglo American fragment designate (£21.11 as at 23 April 2024, being the remaining trading day sooner than the click hypothesis regarding the Initial Proposal);
top fee on the undisturbed market cost of Anglo American’s unlisted sources of roughly 67% (in £ per fragment, as at 23 April 2024);
top fee on the undisturbed market cost of Anglo American’s unlisted sources³of roughly 127% in response to the quantity weighted average closing designate of Anglo American’s shares (adjusted for the attributable quantity weighted average closing costs of Anglo Platinum and Kumba) within the 90 trading days before and alongside with 23 April 2024; and
56% top fee to the dealer median salvage asset cost⁴of Anglo American’s unlisted sources.

The revised proposal represents an amplify within the explain aggregate £ cost per Anglo American customary fragment over the Second Proposal (as announced on 13 Might perhaps 2024) of 11.3%. The terms of the revised proposal portray an amplify over the Initial Proposal:

of 24.8% within the merger trade ratio⁵and BHP Half Consideration; and
20.4% in Anglo American shareholders’ aggregate ownership within the enlarged group (i.e. increasing from c. 14.8% to c.17.8%).

The amplify within the Closing Provide Ratio reflects additional cost from Anglo American’s restructuring proposal and price plans. BHP believes that the Closing Provide Ratio represents a compelling different for prolonged time length predominant cost-introduction for both Anglo American and BHP shareholders.

UK Takeover Code

Pursuant to Rule 2.5 of the Code, BHP reserves the factual:

to accomplish an provide on much less recommended terms:
- with the settlement or consent of the Anglo American Board; or
- following the announcement by Anglo American of a Rule 9 waiver pursuant to the Code; or
- if a third birthday party announces a agency scheme to accomplish an provide for Anglo American at a decrease designate and/or on much less recommended terms than contemplated below the terms of this proposed provide; or
- if the desire of Anglo American shares to be obtained involves any shares held by Tarl Investment Holdings Restricted, Epoch Investment Holdings Restricted, and/or Epoch Two Investment Holdings (together the “Tarl and Epoch shares”), or any of the Tarl and Epoch shares consequence within the grief of additional BHP shares as consideration or in connection with the provide; and/or
to implement the proposed provide by scheme of a takeover provide as in opposition to a design of scheme.

If Anglo American announces, announces, makes, or pays any dividend or any diversified distribution or return of cost to shareholders, Present 4 on Rule 2.5 of the Code applies.

This announcement would not amount to a agency scheme to accomplish an provide and there will possible be no sure wager that an provide will possible be made. There is not any such thing as a sure wager that any form of settlement or transaction will possible be reached or concluded.

This announcement is being made by BHP with out prior settlement or approval of Anglo American.

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Footnotes

1. The Closing Provide Ratio might perhaps well perhaps perhaps not be elevated, moreover that BHP reserves the factual to amplify and/or otherwise reinforce the Closing Provide Ratio if (i) there might perhaps be an announcement on or after the date of this announcement of an provide or that that you just might perhaps well perhaps possible additionally mediate of provide (alongside with a partial provide) for Anglo American by a third birthday party offeror(s) or possible offeror(s) (whether or not identified or not), (ii) the Board of Anglo American announces that it recommends or is minded to counsel an provide on better terms than the Closing Provide Ratio or (iii) the Takeover Panel otherwise provides its consent.
2. This release became once made initiate air of the hours of operation of the ASX markets announcement scheme of enterprise.
3. Anglo American’s unlisted sources contains the entirety of the associated fee implied for Anglo American’s sources and liabilities moreover for its shareholdings in Anglo Platinum and Kumba in response to Anglo American’s closing designate much less the closing costs of Anglo Platinum and Kumba on 23 April 2024, being the remaining trading day before the click hypothesis regarding the Initial Proposal.
4. Acquire asset cost depends mostly upon a median of the six brokers which advise SOTP, alongside with Anglo Platinum and Kumba, alongside newest reported Anglo Platinum and Kumba salvage money balances as of 31 December 2023.
5. In holding with 0.8860 BHP shares for every customary fragment. The need of fully diluted Anglo American shares assumed excludes shares held by Tarl Investment Holdings Restricted, Epoch Investment Holdings Restricted, 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. In holding with explain FX rates as at 21 Might perhaps 2024 (AUD:GBP 0.5243; ZAR:GBP 0.0435).