Miner Anglo American rejects BHP's $38.8 bn takeover bid

The news came one day after BHP had launched its colossal bid, which aims to create the world's biggest listed copper producer.

"The board has considered the proposal with its advisers and concluded that the proposal significantly undervalues Anglo American and its future prospects," the London-listed company said in a statement.

"The board has therefore unanimously rejected the proposal," it said, adding that the BHP offer "contemplates a structure which the board believes is highly unattractive for Anglo American's shareholders".

Anglo advised shareholders to take no action in relation to the gigantic offer, which has the potential to fundamentally reshape the sector.

"The BHP proposal is opportunistic and fails to value Anglo American's prospects, while significantly diluting the relative value upside participation of Anglo American's shareholders relative to BHP's shareholders," said Anglo chairman Stuart Chambers.

"The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders."

BHP is keen to obtain the group's global copper assets that include operations in Chile and Peru.

The bid would first hinge on Anglo splitting off its platinum and iron ore holdings in South Africa.

Chambers insisted, however, that the group was committed to its growth strategy.

"Anglo American has defined clear strategic priorities -- of operational excellence, portfolio, and growth -- to deliver full value potential and is entirely focused on that delivery."

Both Anglo and BHP have been wrestling with the transition away from traditional money makers such as gas and coal, increasingly eyeing opportunities to mine metals and critical minerals.

Copper is critical to the world's transition to renewable energy because it is vital for technology like electric vehicles, solar panels, wind turbines and energy storage.

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