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Anglo American, the parent company of the De Beers Group, has unanimously rejected a buyout offer from mining company BHP Group Limited. | Source: Energy Capital & Power
Anglo American, the parent company of the De Beers Group, has unanimously rejected a buyout offer from mining company BHP Group Limited. | Source: Energy Capital & Power

Highly unattractive: Anglo American rejects shocking BHP proposal

Anglo American, the parent company of the De Beers Group, has unanimously rejected a buyout offer from mining company BHP Group Limited.

Late last week, news broke that BHP had made an unsolicited $USD39 billion ($AUD59.66 billion) offer to acquire Anglo American.

The all-stock buyout offer has been declined, with Anglo American describing the proposal as ‘highly unattractive’.

“The BHP proposal is opportunistic and fails to value Anglo American’s prospects,” chairman Stuart Chambers said in a statement.

"The proposal contemplates a structure which the board believes is highly unattractive for Anglo American's shareholders, given the uncertainty and complexity inherent in the proposal, and significant execution risks.”

Stuart Chambers, Anglo American Chairman
Stuart Chambers, Anglo American Chairman
"The BHP proposal is opportunistic and fails to value Anglo American’s prospects."
Stuart Chambers, Anglo American

BHP said in a statement that if it purchased Anglo American, it would subject all assets to a ‘strategic review’. Anglo American maintains an 85 per cent shareholding of De Beers – the world’s largest diamond mining company.

Recent reports from the Wall Street Journal stated that the company is in discussions about selling the diamond miner.

Whether or not this will be BHP’s only attempt at acquiring Anglo American remains unclear.

“BHP could certainly come back with a more generous offer, and we could also possibly see other suitors come to the table,” industry analyst Paul Zimnisky told National Jeweler.

“There are a lot of moving parts, but it feels like if [Anglo] were to sell De Beers now, it would be selling at the bottom, and I think De Beers needs to be in the hands of someone who thinks longer-term and will spend the marketing dollars necessary to keep diamonds relevant into the future.”

He added: “De Beers needs to be coddled right now. It can’t be sold off to someone who sees it as a value play.”

BHP’s bid for Anglo American was non-binding, and it has until 22 May to make a formal offer.

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