How BHP’s CEO prepared for the Anglo American offer

Dubbed ‘Meticulous Mike’ by the Australian media, BHP (ASX: BHP) CEO Mike Henry must have carefully planned his move for Anglo American (LON: AAL), down to the inevitable initial rejection, according to people familiar with the matter, the Financial Times reported.

Since he took the miner’s top role, Henry has led a series of smaller acquisitions.

First, BHP bought out minority partner Hess Corporation in a $505 million oil deal in the Gulf of Mexico. That was followed by a failed bid for Noront, the purchase of a different nickel business in Tanzania in 2022, and the $6.4 billion buyout of Oz Minerals in 2023.

Looking back, Henry was ‘almost walking the board, the company, and the investors up the ladder, back to big acquisitions,’ an investor told the Financial Times.

Anglo American rejected the $39 billion takeover offer from BHP, which was conditional to the target company divesting its platinum and iron ore businesses in South Africa.

BHP’s unsolicited offer ‘significantly undervalued’ the 107-year-old mining company and would be ‘highly unattractive’ to its shareholders, Anglo said on Friday in a response widely expected by analysts.

‘The BHP proposal is opportunistic and fails to value Anglo American’s prospects,’ Anglo chairman Stuart Chambers said in the statement.

BHP has until May 22 to make a formal bid.

A takeover would rank as the industry’s biggest ever transaction, according to Dealogic.

A merger would also give BHP about 10% of global copper production. It would also boost its presence in the world’s top copper-producing countries, Chile and Peru, as it would gain access to four of the world’s largest copper mines — Collahuasi (with ownership of 44%), Los Bronces (50.1%), El Soldado (50.1%), and Quellaveco (60%). This would improve the company’s exposure to the metal, a key actor in the world’s ongoing energy transition, by about 40%.

‘Anglo is in play, and the game is on,’ said one person familiar with the approach.

According to the Financial Times, colleagues describe Henry as ‘reserved’ and lacking the more assertive traits of some of his peers in the Australian mining sector. Behind the scenes, however, they said he is clear on what his expectations are and makes arguments forcefully.

‘Henry was everything you’d imagine of a CEO of an efficient, process-driven company, but has been bolder around repositioning the portfolio and M&A than previous management,’ one long-time shareholder said.

Ben Davis, a mining analyst at Liberum, told the Financial Times that few investors were ‘rushing out selling BHP’ on the back of the proposed deal.

“Shareholders have a lot of faith in Mike Henry. No one thinks he is a juiced-up M&A junkie.”