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Diversified major Anglo American has rejected a revised proposal put forward by BHP, which valued the UK-headquartered miner at about £34-billion.

The structure of the revised proposal, unveiled on Monday, remained unchanged from the previously rejected proposal of last month. It comprises an all-share offer for Anglo, with a requirement to complete two separate demergers of the South African units, Anglo American Platinum (Amplats) and Kumba Iron Ore.

The all-share offer and required demergers will be inter-conditional.

Under the revised offer, Anglo shareholders will receive 0.8132 BHP shares for each ordinary share they own, as well as ordinary shares in Amplats and Kumba.

The revised proposal represents a total value, based on undisturbed share prices, of about £27.53 per Anglo American ordinary share, including £4.86 in Amplats shares and £3.40 in Kumba shares, valuing Anglo’s share capital at about £34-billion.

The revised proposal represents a 15% increase in the merger exchange ratio and increases Anglo American shareholders’ aggregate ownership in the combined group to 16.6% from 14.8% in BHP’s first proposal.

The revised proposal compares with BHP’s initial £25-a-share proposal, which was deemed inadequate by Anglo and its shareholders. Market sentiment as gauged from analysts and traders surveyed by Bloomberg last month, converged around an average price of £30.43 a share for a potential deal, with responses ranging between £28 and £35.

“BHP put forward a revised proposal to the Anglo American board that we strongly believe would be a win-win for BHP and Anglo American shareholders. We are disappointed that this second proposal has been rejected,” said CEO Mike Henry.

However, Anglo chairperson Stuart Chambers said the latest proposal from BHP “again failed to recognise the value inherent in Anglo”.

Chambers also said that BHP’s proposal continued to have an unattractive structure that left Anglo, its shareholders and stakeholders disproportionately at risk from the uncertainty and execution risk created by the proposed inter-conditional execution of two demergers and a takeover.

Anglo calculates the Amplats and Kumba shareholdings, at current market value, to be worth about $15-billion and 34% of the proposed total consideration.

“This is a substantial amount of stock to distribute and reflects a majority of the shares of both Anglo American Platinum Limited and Kumba Iron Ore Limited. This creates significant uncertainty as to the delivered value as part of the proposal.”

Meanwhile, Henry emphasised the strategic alignment between BHP and Anglo, stating that the companies were a strategic fit and that the combination was a “unique and compelling opportunity to unlock significant synergies”.

“The combined business would have a leading portfolio of high-quality assets in copper, potash, iron-ore and metallurgical coal and BHP would bring its track record of operational excellence to maximise returns from these high-quality assets,” he said.

“The combined business would also have the balance sheet strength, capital discipline and operational capability to execute the attractive pipeline of growth options in BHP and Anglo American’s portfolios.

“In putting forward a revised proposal, we have been guided by our capital allocation framework and our view of the fundamental value of Anglo American and BHP,” added Henry.