A takeover of Anglo American would need to be pitched at more than £30 ($37.6) a share, a higher price than BHP Group offered last week, according to analysts and traders surveyed by Bloomberg.
Anglo American shares are trading above the value of BHP’s rebuffed $39-billion takeover proposal, a sign traders are also expecting a higher bid. The premium has increased since Bloomberg News reported over the weekend that BHP is considering making an improved proposal.
Of the 12 survey participants who gave an acceptable price for a possible deal, the average value was £30.43 per share, with a range in responses between £28 and £35.
Analysts at Deutsche Bank led by Liam Fitzpatrick see two possible scenarios: either the company is acquired at an improved price, or Anglo American delivers on some of the divestments proposed by BHP, which include a spin-off of platinum and iron-ore subsidiaries.
A bid price above £31 would reflect fuller value, particularly if a cash component is introduced to compensate for uncertainties related to the spin-offs, Fitzpatrick wrote in a research note published Monday.
There is no certainty that any offer will ultimately be made. BHP has until May 22 to announce a firm intention to make an offer.