BHP, Anglo American merger looks unlikely as talks fail to progress – FT (NYSE:BHP)

BHP (NYSE:BHP) and Anglo American (OTCQX:AAUKF) (OTCQX:NGLOY) have failed to make progress on terms for their proposed £39B merger, making an agreement by the deadline of 5 p.m. in London on Wednesday unlikely, Financial Times reported Tuesday.

Although last week’s extension has led to the first meaningful engagement between the two sides, the parties reportedly still fundamentally disagree on the deal structure after six days of talks.

Under U.K. takeover rules, Anglo (OTCQX:AAUKF) (OTCQX:NGLOY) could grant a further extension for talks to continue, but its board appears unlikely to do so unless a possible way forward emerges, according to the report.

BHP (BHP) CEO Mike Henry is said to have been meeting investors in London since Monday in an effort to add pressure on Anglo (OTCQX:AAUKF) (OTCQX:NGLOY) for another extension; many large asset managers such as BlackRock hold shares in both companies.

Anglo (OTCQX:AAUKF) (OTCQX:NGLOY) and BHP (BHP) reportedly disagree on the execution risks associated with demerging South Africa’s Anglo American Platinum (OTCPK:AGPPF) (OTCPK:ANGPY) and Kumba Iron Ore before BHP would complete its takeover.

“Unless BHP has shown it is willing to compromise on the structure, I don’t see how Anglo’s board can recommend this offer,” one person close to Anglo American (OTCQX:AAUKF) (OTCQX:NGLOY) reportedly told FT.