The world’s top diversified miner BHP has made a third unsolicited conditional takeover proposal for smaller rival Anglo American on Wednesday, only hours before its initial deadline for a firm intention to make an offer expired.

The board of London-listed Anglo American rejected the latest proposal of £29.34 a share, but agreed to a one-week extension to the 'put up, or shut up (PUSU)' deadline under UK Takeover rules.

BHP's plan continues to involve an all-share offer, with a requirement for the company to complete two separate demergers of its shareholdings in South Africa-focused Anglo American Platinum (Amplats) and Kumba Iron Ore to shareholders. The all-share offer and required demergers are inter-conditional.

Anglo estimates that BHP's proposed process will likely take a year-and-a-half or more to complete, whereas the key elements of its standalone restructuring plan, announced last week, will be substantively complete by that time.

"[The latest proposal] does not address the board's concerns about the structure, which results in significant complexity, execution risks, an extended timeline to completion and consequently has the potential for material value leakage to be disproportionately suffered by Anglo American's shareholders," said Anglo chairperson Stuart Chambers.

He said "multiple engagements" with the BHP team were not able to resolve the impasse.

However, Anglo's board left the door open and said it was willing to continue to engage with BHP and its adviser. The PUSU deadline would now be May 29 at 17:00.

Earlier on Wednesday, Anglo major shareholder South Africa’s Public Investment Corporation (PIC) said the offer from BHP should reflect both the embedded value of existing Anglo assets and the future optionality and benefits that BHP could derive, specifically from Anglo’s unlisted assets.

“This would require a meaningful revision of the current BHP proposal that should take into consideration the material risks that current shareholders of both Anglo and its subsidiaries would have to assume,” said the PIC in a statement, before Anglo revealed BHP's third proposal.

Under the terms of the latest proposal, for each share owned, Anglo’s shareholders would receive 0.8860 BHP shares and ordinary shares in each of Amplats and of Kumba.

The latest proposal represent a total value, based on undisturbed share prices as at market close on April 23, of about £29.34 a share. On the basis of the 30-day and 90-day volume-weighted average share prices up to and including April 23, the terms of the latest proposal would value Anglo at £29.91 and £29.67 a share, respectively.

BHP said that the offer ratio, which it stressed was its final one, represented a value of £31.11 a share, based on the closing price of BHP on May 22 and Amplats and Kumba on May 21.

"BHP has put forward a final offer ratio of 0.8860 BHP shares for each Anglo American share. This is a significant increase from our first proposal and would provide Anglo American shareholders with 17.8% of a combined BHP and Anglo American.

"The revised proposal is underpinned by BHP's disciplined approach to mergers and acquisition and our focus on delivering long term fundamental value," said CEO Mike Henry.