Coal buyers hope BHP’s ambitious bid for Anglo American fails

Anglo American has flagged a sale of the assets as part of a break-up if BHP doesn’t buy the business. Picture: AFP

If there’s one group that hopes BHP does not buy Anglo American, it’s the investors already sizing up the latter’s lucrative metallurgical coal mining portfolio.

DataRoom understands that a number of bidders have already registered their interest in Anglo American’s attractive coal mines in Australia, which include Grosvenor and Moranbah North in Queensland’s Bowen Basin.

Anglo American has flagged a sale of the assets as part of a break-up if BHP doesn’t buy the business.

But as already reported by The Australian last week, that’s looking increasingly unlikely after BHP lifted its offer and Anglo American extended the deadline for it to come back with a formal approach to May 29.

This week the question is whether BHP drops its demand that the South African iron ore business Kumba be handed to shareholders, and instead opts to sell that business over time.

BHP is unlikely to lift its price much further, but dropping just one condition may be enough to get it over the line.

The suitors lining up for Anglo American’s coal mines are thought to include Stanmore Coal, which has Indonesian backers, along with Yancoal, Whitehaven Coal, Peabody Energy, Coronado Global Resources and Glencore.

BHP could also be in the mix.

Before the bidding war for Anglo American, Jefferies analysts valued the metallurgical coal assets at $US3.3bn.

The portfolio includes several mines in Australia: Moranbah North, Capcoal, Dawson, Grosvenor and Aquilla in Queensland and an interest in Jellinbah and the potential Moranbah South project.

BHP lobbed a “final” offer last Wednesday night, where Anglo shareholders would emerge with 17.8 per cent of the merged group or 0.886 BHP shares for each Anglo share on issue.

The company’s latest bid values Anglo shares at £31.11, including £5.40 in Amplats shares and £4.23 in Kumba shares, bringing the total valuation of the company to £38.6bn ($74.2bn).

BHP’s initial offer valued the company at STG31.1bn or $59bn.