BHP Group has dispatched a group of senior executives to South Africa to gain the support of local shareholders, government officials, and regulators, according to media reports.
This comes after BHP, which is the largest miner in the world, proposed to take over rival Anglo American last week.
Anglo, however, rejected the proposal, calling it “highly unattractive”.
Bloomberg reports that individuals with knowledge of the situation claim that executives have already initiated discussions with key stakeholders, focused on elucidating the specifics and advantages of the $39 billion deal that is presently undergoing revisions after its target company swiftly rejected it.
BHP, notwithstanding its historical ties, is getting off to a shaky start in South Africa, the country where Anglo was established in 1917, and continues to be a household name because its approach for the smaller miner caught senior officials off guard.
A component of BHP's intricate proposition is for Anglo to spin off its platinum and iron ore operations, which are publicly traded in Johannesburg, before an eventual acquisition of the other assets.
The government is confronted with a difficult time following the announcement that BHP desires an Anglo-American shaft of Kumba Iron Ore and Anglo American Platinum (Amplats).
A general election is scheduled to take place in the country later this month.
In a nation with a crumbling infrastructure and one of the highest unemployment rates in the world, the opposition has already characterised BHP's offer as a severe rebuke of the government's economic management, Bloomberg reports.
Sources said that BHP's team intends to engage with the administration of President Cyril Ramaphosa and other key stakeholders, outlining the precise details of the multi-stage deal and the advantages of returning control of Amplats and Kumba to South Africa, including a greater proportion of their cash flow remaining domestic and a larger free float on the JSE.
At least 8.4% of Anglo's shares are owned by South Africa’s state pension fund.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
