The Zhitong Finance App learned that investors who understand the thoughts of international mining giant BHP.US (BHP.US) executives said that BHP Billiton's plan to divest the target South African equity assets under Anglo American (Anglo American) is one of the most critical strategies behind the acquisition plan and is expected to be part of the revised offer.

Earlier, on April 26, the mining giant, headquartered in Australia, proposed a huge acquisition plan of 39 billion US dollars, but it was rejected by a smaller competitor, Anglo-American Resources Group, which is also the target of the acquisition.

According to reports, the proposed plan is viewed as extremely complicated because the plan requires copper mining giant Anglo-American Resources Group to sell its shares in Kumba Iron Ore and Anglo American Platinum to shareholders of Anglo-American Resources Group before reaching a deal.

According to information, Anglo-American Resources Group owns 78.6% of Amplats's shares and 69.7% of Kumba's shares.

The South African government is carefully reviewing the proposed huge deal. Commenting to the Financial Times, the country's mining minister Gwede Mantashe (Gwede Mantashe) said he was cautious about BHP Billiton's proposal because the country's previous experience with BHP Billiton was “not positive.”

However, a well-known fund manager holding shares in BHP Billiton said that BHP Billiton believes that allocating Kumba and Amplats shares would be beneficial to South Africa because it would increase the freely tradable shares of these two companies and achieve an important goal of South African regulators.

Another fund manager said that the move would also trigger market purchases linked to the benchmark index and hand over these assets to natural holders in South Africa.

One of the fund managers said, “BHP Billiton has spent a lot of time studying the impact of all backflows, and I'm sure they are all studying this issue.”

BHP Billiton declined to comment, but mentioned its May 2 statement to the media. The statement said that the structure of its proposed acquisition, including the proposal to allocate shares of Anglo-American Resources Group in Amplats and Kumba to shareholders, reflects the priorities of BHP Billiton's investment portfolio and opportunities for synergy.

New proposals

According to media reports, five sources with direct knowledge of the situation said that BHP Billiton and its financial advisors met with BHP Billiton investors in the past few days to seek feedback on the prospects of the deal.

According to media reports, two of the sources said that investors in BHP Billiton have always supported the acquisition, but warned the company not to pay too high a purchase price to gain control of the Anglo-American Resources Group. Analysts also support takeover price increases based on long-term copper prices.

Analysts at well-known investment agency Macquarie said on Tuesday that BHP Billiton may be able to justify a 30-45% control premium, partly due to rising cost efficiency and copper prices, which means that Anglo-American Resources Group's stock price will reach £27-30 per share. The rejected offer of BHP Billiton to Anglo-American Resources Group was £25.08 ($31.44) per share.

Anglo-American Resources Group declined to comment, saying it recommended that the media refer to the statement issued on April 26, which rejected BHP Billiton's proposal.

According to media reports, at least one shareholder encouraged BHP Billiton to consider retaining Anglo-American Resources Group's shares in Amplats and Kumba rather than exiting South African assets.

The person familiar with the matter said that once the transaction is completed, the fully merged BHP Billiton and Anglo-American Resources Group may formally consider selling these assets, which will reduce the complexity and execution risk of the transaction.

However, one investor also said that it is unlikely that BHP Billiton will sell these assets at a later stage. “As a result, the premium may be higher.”

“Anglo-American Resources Group may be driving the cash monetization portion, but we may prefer short-term stocks,” a fund manager said. He added that his fund had very little feedback on BHP Billiton unless the price level had to change.

According to the original plan, BHP Billiton proposed an all-stock acquisition plan, which is thought to be about 31% premium over Anglo-American Resources Group's stock market closing price on April 23.

According to reports, mining giant BHP Billiton must submit an official offer to Anglo-American Resources Group before May 22. The media reported last month that the Australian mining giant is considering raising its offer.

According to some surveys, the purchase price of British and American resources may need to exceed £30 per share

According to a Bloomberg survey, analysts and traders generally believe that the acquisition price of Anglo-American Resources Group would require more than £30 ($37.6) per share, which is higher than the proposed purchase price previously proposed by BHP Billiton.

The current value of Anglo-American Resources Group is higher than BHP Billiton's $39 billion acquisition offer, which indicates that traders are also expecting higher bids. According to media reports, BHP Billiton is considering making a higher offer for Anglo-American Resources Group after the initial takeover proposal was rejected.

Twelve respondents gave an acceptable price for the potential deal. The average price was £30.43 per share, and the price range given was between £28 and £35.

Deutsche Bank analysts, led by Liam Fitzpatrick, believe that two situations may occur: either Anglo-American Resources Group is bought at a higher price, or Anglo-American Resources Group fulfills part of the divestment plan proposed by BHP Billiton. Fitzpatrick said bids above £31 would reflect fuller value, particularly if cash is introduced to cover the uncertainty associated with the spin-off.