Sources claim that BHP is adamant that Anglo American’s South African assets be included in any acquisition

Investors briefed on the miner’s thinking stated that BHP’s (BHP.AX), opens new tab intention to offload the South African assets of its target Anglo American (AAL.L), opens new tab are essential to the strategy underpinning the planned takeover and are expected to be included in any amended offer.

The $39 billion takeover plan, which was viewed as complex because it required Anglo to offload its shares in Kumba Iron Ore (KIOJ.J) and Anglo-American Platinum (Amplats) (AMSJ.J) to Anglo American’s shareholders before any deal took place, was rejected by its smaller rival on April 26 after the “Big Australian” submitted the proposal.

78.6% of Amplats and 69.7% of Kumba are owned by Anglo Americans.
The proposed merger is being closely examined by the government of South Africa. The nation’s mining minister, Gwede Mantashe, expressed caution about BHP’s proposal to the Financial Times, citing the nation’s “not positive” prior experience with the company.

However, according to a fund manager who owns BHP shares, BHP sees benefits for South Africa in distributing the shares of Kumba and Amplats, as this would increase the free float in those two businesses and accomplish an objective of the nation’s regulator.

According to a second fund manager, it will also start index-linked buying and transfer the assets to South African natural holders.

“BHP has thoroughly examined the flow-back implications and I am sure they have their act together,” remarked a fund manager.

While BHP declined to comment, it directed Reuters to a statement it released on May 2nd, in which it stated that the structure of its takeover bid reflected the company’s portfolio goals and opportunities for synergies, including the planned distribution of Anglo’s shares in Amplats and Kumba to its shareholders.