Diversified miner Anglo American has firmly rebuffed a $38.8-billion proposal from mining heavyweight BHP, with chairperson Stuart Chambers dismissing the nonbinding offer as “highly unattractive”.

In a statement released on Friday, Chambers labelled the BHP proposal as opportunistic and lacking in appreciation for Anglo’s prospects.

He further criticised the offer for significantly diluting the relative value upside participation of Anglo’s shareholders compared to BHP’s shareholders.

Moreover, the proposed structure of the deal was deemed unappealing, as Anglo believes it would bear nearly all execution risks associated with the proposal.

BHP on Thursday announced a nonbinding combination proposal entailing an all-share offer, with the requirement for Anglo to complete two separate demergers of Anglo American Platinum (Amplats) and Kumba Iron Ore to its shareholders.  The all-share offer and required demergers would be inter-conditional.

BHP offered Anglo shareholders £25.08 a share, including £4.86 a share for Amplats shares and £3.40 a share for Kumba Iron Ore shares.

Chambers pointed out that Anglo was well positioned to create value from its portfolio of assets that were aligned with the energy transition and other major demand trends.

"With copper representing 30% of Anglo American’s total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products, the board believes that Anglo American’s shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materialises," he said.

Anglo shareholders are advised to take no action in relation to the possible offer.

Under the UK Takeover Code, BHP must by no later than 17:00 on May 22 either announce a firm intention to make an offer for Anglo or walk away.