Money of Mine BHP’s Approach was Amateurish says Investment Banker Tshepo Magagane
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May 29, 2024 In this engaging discussion, Tshepo Magagane, a former South African investment banker with expertise in African mining M&A, critiques BHP's handling of the Anglo acquisition. He delves into the complexities of valuing Anglo assets, highlighting why a £50 share price makes sense. Tshepo points out structural pitfalls BHP ignored and emphasizes the importance of early stakeholder engagement. He also discusses the competitive landscape, including China's and Gulf states' growing interests in African mining. Overall, he warns of a pressing capital need in the copper sector.
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Copper Price Is The Core Valuation Battleground
- Copper price assumptions drive almost all valuation differences between BHP and Anglo-American.
- Tshepo Magagane argues a fair asset price implies about £50/share, which BHP shareholders will resist.
BHP’s Approach Came Across As Naive
- BHP's public stance of not changing price or structure looks naive to insiders.
- Magagane calls BHP's approach amateurish and surprised advisors overlooked key issues.
Engage South African Authorities Early
- Bring South African authorities into the loop early on cross-border deals.
- Consult the ministers and regulators before finalizing structure or public announcements.