BHP has walked away from the Anglo deal – unsurprisingly, everything has a price, we feel on balance, it was the right decision. What did surprise us, was commentariat suggesting how amateur their takeover attempt was, and that BHP should have upped their Offer. Despite the fact that AAL was up 45% on the Bid!
That £39Bn bid was close to total net asset value, taking into account high risk countries that AAL operates in. BHP wanted primarily to acquire their copper assets, for two key reasons, namely: (i) it’s currently cheaper to buy an existing operation than to develop one from scratch; and (ii) copper prices are (in real times) at depressed levels, the M&A risk of an excessive premium paid, had largely been negated.
We reiterate our belief that we are at the nadir of a once in a generation scramble for key commodities and energy. Another commodities boom is just about upon us.
