BHP may go after Rio Tinto after $AAL rejection

BHP Group Ltd may go after Rio Tinto Ltd now that Anglo American plc has rejected its takeover proposal, says John Meyer. He’s a partner at SP Angel. 

BHP and Rio have had discussions in the past

$AAL turned down the $39 billion offer today citing “undervaluation” as Invezz reported here.

On CNBC’s “Street Signs Europe”, Meyer agreed that Angle American was an “easy target” but argued that it may not be the “main target”. 

In fact, BHP and Rio Tinto may now “be quite keen to get together”, he added on Friday. Note that the two companies have already had discussions in the past. 

The world’s largest mining company by market cap has not so far indicated plans of raising its bid for Anglo American. Its stock is down nearly 20% versus the start of 2024. 

Meyer sees a severe shortage of copper ahead

John Meyer sees copper as the primary reason that made BHP propose a merger with Anglo American in the first place. 

Miners are committed to strengthening their position in the metal as a “fairly severe shortage of copper is coming at us”, he added. 

Copper is currently trading at an all-time high of nearly $10,000 a ton but the SP Angel expert is convinced it has to hit $12,000 to $15,000 for “these big mining companies to start developing new mines”. 

In February, BHP said its revenue increased 6.0% on a year-over-year basis to $27.23 billion in the half year ended December 31st, 2023.