Another sign M&A activity is on the rise...BHP has offered
$39 BILLION USD ($53.45 Billion CAD) to takeover Anglo American.
BHP targets Anglo American in bid valued at $39 billion --
A successful takeover would represent the
first mega deal among the world’s biggest diversified miners in over a decade. BHP and its biggest rivals spent years on the sidelines after a series of disastrous transactions, but there has been a growing expectation that the industry is heading for a wave of M&A as companies are flush with cash and management teams have worked hard to reassure investors that they have learned from past mistakes.
“If BHP does indeed continue to pursue this deal, we would be surprised if other bidders do not emerge,” analysts from Jefferies LLC led by Christopher LaFemina said in an emailed note. A bid that values Anglo at $42.6 billion — a 28% premium based on its latest share price — might get a deal “across the finish line,” they said.
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If we start to see deals of this size get done, a deal valuing LME at $2 billion CAD, or $8+ / share is entirely possible. Senior producers need to replenish their depleted reserves, and buying up mid/advanced stage junior explorers is a good way to do that.