BHP: Increased and lastprovide ratio for Anglo American

Issued on behalf of BHP Team Ltd

BHP Team Ltd (BHP) notes the announcement by Anglo American plc (Anglo American) regarding the extension of the deadline for a BHP proposal (theExtension Announcement).

As mentioned in Anglo American’s announcement of 24 April 2024, BHP was required to either lisp a firm draw to create a proposal for Anglo American or lisp that it does not intend to create a proposal by 5.00 p.m. (BST) on 22 Could maybe well 2024. As space out within 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 (theTakeover Panel).

BHP confirms that on 20 Could maybe well 2024 it submitted an elevated and last provide ratio to the Board of Directors of Anglo American as piece of its proposal for a seemingly aggregate with Anglo American to be effected by manner of a method of blueprint. In declaring the Final¹Offer Ratio (as defined below), BHP has been guided by its capital allocation framework and its ogle of the elemental worth of Anglo American and BHP.

The revised proposal follows BHP’s preliminary 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 Could maybe well 2024 (2nd Proposal).

The transaction structure of the revised proposal remains the same as BHP’s earlier proposals and comprises an all-share provide for Anglo American topic to the educated-rata distribution by Anglo American of its total shareholdings in Anglo American Platinum Ltd (English Platinum) and Kumba Iron Ore Ltd (At home) to Anglo American shareholders immediately sooner than completion of the strategy of blueprint. For the reason that submission of the revised proposal, we’ve been enticing with Anglo American and its advisors to relieve mitigate the considerations associated with the implementation of this structure that ended in the rejection of the revised proposal. We uncover now made development on these themes over the route of the engagement so far, and we’re hopeful that call would maybe be reached within the next seven days.

Below the extended deadline, BHP must either lisp a firm draw to create a proposal for Anglo American in accordance with Rule 2.7 of the UK Code or lisp that it does not intend to create a proposal for Anglo American, wherein case the announcement would maybe be treated as an announcement to which Rule 2.8 of the UK Code applies, by no later than 5.00 p.m. (BST) on 29 Could maybe well 2024 (theRevised Deadline). The Revised Deadline might well maybe be extended with the consent of the Panel in accordance with Rule 2.6(c) of the UK Code.

Construction of the proposal

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

• 0.8860 BHP shares for every frequent share they uncover in Anglo American (BHP Share Consideration), which represents Anglo American shareholders owning, in aggregate, approximately 17.8% of the combined BHP and Anglo American physique of workers on completion of the aptitude aggregate (theFinal¹Offer Ratio); and
• frequent shares in Anglo Platinum and Kumba (which would be dispensed by Anglo American to its shareholders in divulge proportion to every shareholder’s efficient hobby in Anglo Platinum and Kumba).

The Final Offer Ratio represents a total worth of £31.11 per Anglo American share based completely on the closing share costs of BHP as at 22 Could maybe well 2024 and Anglo Platinum and Kumba as at 21 Could maybe well 2024.

The Final Offer Ratio might well well not be elevated, rather than that BHP reserves the simply to raise and/or otherwise support the Final Offer Ratio if (i) there is an announcement on or after the date of this announcement of a proposal or that you might well maybe be uncover provide (including a partial provide) for Anglo American by a third uncover collectively offeror(s) or seemingly offeror(s) (whether or not identified or not), (ii) the Board of Anglo American proclaims that it recommends or is minded to point out a proposal on better terms than the Final Offer Ratio or (iii) the Takeover Panel otherwise presents its consent.

The combined physique of workers would uncover a number one portfolio of plentiful, low-worth, lengthy-existence Tier 1 assets exasperated by iron ore and metallurgical coal and future facing commodities, including potash and copper. Anglo American’s other excessive quality agencies, including its diamond enterprise, would be topic to a strategic overview post completion.

BHP is committed to a aggregate that leverages the easier of every and each BHP and Anglo American and intends to provide Anglo American as much as two positions on the Board of the combined entity.

BHP will work intently and constructively with competition regulators and provide the data they must assess the aptitude transaction. BHP is assured that it will manufacture all required regulatory approvals and consummate a transaction that advantages customers globally.

The revised proposal is non-binding and topic to earlier skool prerequisites including completion of due diligence to the pride of BHP. Anglo American has been offered reciprocal due diligence on BHP.

Mike Henry, BHP Chief Executive Officer mentioned:

“BHP has recommend a final provide ratio of 0.8860BHP shares for every Anglo American share. It’s miles a vital raise from our first proposal and would provide Anglo American shareholders with17.8% of a combined BHP and Anglo American.

The revised proposal is underpinned by BHP’s disciplined ability to mergers and acquisition and our focal point on turning in lengthy time interval principal worth.

BHP’s revised proposal will provide instant worth for Anglo American shareholders and enable them to wait on from the lengthy-time interval worth generation of the combined physique of workers.

BHP looks forward to enticing with the Board of Anglo American to explore this weird and compelling opportunity to raise collectively two highly complementary, world class agencies.”

Price of the proposal

The terms of the proposal signify a total worth, based completely on command share costs and FX charges⁶as at 22 Could maybe well 2024 for BHP and 21 Could maybe well 2024 for Anglo Platinum and Kumba, of roughly £31.11 per Anglo American frequent 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% top class on the combination £ worth per Anglo American frequent share over the undisturbed Anglo American share ticket (£21.11 as at 23 April 2024, being the last trading day sooner than the press speculation concerning the Initial Proposal);
• top class on the undisturbed market worth of Anglo American’s unlisted assets of roughly 67% (in £ per share, as at 23 April 2024);
• top class on the undisturbed market worth of Anglo American’s unlisted assets³of roughly 127% based completely on the amount weighted common closing ticket of Anglo American’s shares (adjusted for the attributable quantity weighted common closing costs of Anglo Platinum and Kumba) within the 90 trading days sooner than and including 23 April 2024; and
• 56% top class to the broker median win asset worth⁴of Anglo American’s unlisted assets.

The revised proposal represents an raise within the command aggregate £ worth per Anglo American frequent share over the 2nd Proposal (as announced on 13 Could maybe well 2024) of 11.3%. The terms of the revised proposal signify an raise over the Initial Proposal:

• of 24.8% within the merger change ratio⁵and BHP Share Consideration; and
• 20.4% in Anglo American shareholders’ aggregate ownership within the enlarged physique of workers (i.e. increasing from c. 14.8% to c.17.8%).

The raise within the Final Offer Ratio displays extra worth from Anglo American’s restructuring proposal and worth plans. BHP believes that the Final Offer Ratio represents a compelling opportunity for lengthy time interval principal worth-advent for each and each Anglo American and BHP shareholders.

UK Takeover Code

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

• to create a proposal on much less favourable terms:
  • with the agreement 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 uncover collectively proclaims a firm draw to create a proposal for Anglo American at a decrease ticket and/or on much less favourable terms than contemplated under the terms of this proposed provide; or
  • if the preference of Anglo American shares to be obtained contains any shares held by Tarl Investment Holdings Restricted, Epoch Investment Holdings Restricted, and/or Epoch Two Investment Holdings (collectively the “Tarl and Epoch shares”), or any of the Tarl and Epoch shares end result within the disclose of extra BHP shares as consideration or in connection with the provide; and/or
• to put into effect the proposed provide by manner of a takeover provide as in opposition to a method of blueprint.

If Anglo American proclaims, broadcasts, makes, or pays any dividend or another distribution or return of worth to shareholders, Show masks 4 on Rule 2.5 of the Code applies.

This announcement does not amount to a firm draw to create a proposal and there might well maybe be no certainty that a proposal would maybe be made. There just is not any certainty that any create of agreement or transaction would maybe be reached or concluded.

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

Be taught also:

• BHP confirms that on 20 Could maybe well 2024 it submitted an elevated and last provide ratio to the Board of Directors of Anglo American
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• LGIM approves Anglo American’s smash-up conception amid BHP takeover deadline

Footnotes

• 1.   The Final Offer Ratio might well well not be elevated, rather than that BHP reserves the simply to raise and/or otherwise support the Final Offer Ratio if (i) there is an announcement on or after the date of this announcement of a proposal or that you might well maybe be uncover provide (including a partial provide) for Anglo American by a third uncover collectively offeror(s) or seemingly offeror(s) (whether or not identified or not), (ii) the Board of Anglo American proclaims that it recommends or is minded to point out a proposal on better terms than the Final Offer Ratio or (iii) the Takeover Panel otherwise presents its consent.
• 2.   This launch was made from doorways of the hours of operation of the ASX markets announcement role of enterprise.
• 3.   Anglo American’s unlisted assets comprises the total lot of the worth implied for Anglo American’s assets and liabilities rather than its shareholdings in Anglo Platinum and Kumba based completely on Anglo American’s closing ticket much less the closing costs of Anglo Platinum and Kumba on 23 April 2024, being the last trading day sooner than the press speculation concerning the Initial Proposal.
• 4.   Rep asset worth is based completely upon a median of the six brokers which dispute SOTP, including Anglo Platinum and Kumba, alongside most up-to-date reported Anglo Platinum an d Kumba win cash balances as of 31 December 2023.
• 5.   Essentially based on 0.8860 BHP shares for every frequent share. The preference of completely 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.   Essentially based on command FX charges as at 21 Could maybe well 2024 (AUD:GBP 0.5243; ZAR:GBP 0.0435).