BHP Is Said to Have Offered £40 Billion in Aborted Anglo Bid

BHP -0.27% AAUKF +6.60%

(Bloomberg) -- BHP Group offered around £40 billion ($53 billion) in its now-aborted attempt to acquire Anglo American Plc,  according to people with knowledge of the matter.

The commodities giant bid about £34 per share for Anglo American, the people said, asking not to be identified because the information is private. The offer was mostly stock, but also included a cash component, Bloomberg News has reported.

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BHP sent a detailed proposal to Anglo American’s board late on Nov. 20, people with knowledge of the matter have said. A bid of around £34 per share would imply a premium of about 24% to Anglo American’s closing price that day of £27.36, or its market value of roughly £32 billion.

Shares of Anglo American rose as much as 2.7% to the highest level in more than two weeks in London on Monday.

Bloomberg News first revealed on Nov. 23 that BHP had made a takeover approach to Anglo American, which was rejected. BHP then publicly confirmed the discussions and said it had decided to walk away. Neither company has disclosed the level of the BHP’s bid.

Anglo American rejected the offer after deciding that its own planned acquisition of Canada’s Teck Resources Ltd. would generate more value, according to the people. It was also concerned about a prolonged regulatory approval process for a tie-up with BHP, which meant that the value of the bid could fluctuate significantly due to potential volatility in BHP shares before the deal was closed, some of the people said.

BHP’s proposal would imply a nearly 50% premium to Anglo American’s closing price on Sept. 8, a day before the Teck announcement. Shares of BHP have risen about 6.6% in London this year, giving it a market capitalization of almost £106 billion.

The proposed premium can vary, depending on which stock price and timeframe are used by the bidder as a reference point. Representatives for Anglo American and BHP declined to comment.

(Adds Anglo’s share moves in fourth paragraph and more details in seventh paragraph.)

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