Anglo American has today rejected rival miner BHP Group’s £31.1 billion takeover proposal, saying the bid significantly undervalued the London-listed miner and its future prospects.

“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,” Anglo Chairman Stuart Chambers said in a statement.

BHP had said it would offer £25.08 per Anglo share, a premium of 31% from the stock’s previous close before the bid was made public yesterday.

Anglo shares rose 16.1% to 25.60 pounds in London trading on Thursday.

BHP’s shares closed 4.6% lower today. The company’s Australian stock did not trade on Thursday as the Australian share market was closed for a holiday.

Questions about jurisdictional risks in South Africa and other regions, and concerns that Anglo American’s businesses are lower margin than BHP’s led to a share sell off, said RBC analyst Kaan Peker in Sydney.

“That uncertainty I think is resulting in a bit of a reduction on what investors are willing to pay for forward earnings,” Peker said.

Some BHP investors also remained to be convinced over the merits of the deal.

“I am a bit surprised that the deal is not an agreed deal. It likely means BHP will need to offer more to win over shareholders and management and risks creating unhelpful animosity,” said Portfolio Manager Brenton Saunders at Pendal.

“The deal is complicated in that Anglo has a complicated structure with a number of moving parts like AngloPlats, Kumba and De Beers. It’s not clear how BHP adds value to the deal if it is required to offer considerably more,” he added.

Consensus is growing that BHP will have to sweeten its offer to get the deal done. BHP has until May 22 to make a binding bid.

Before Anglo rejected the proposal, Reuters had reported the management team did not consider it as attractive, as some investors and analysts dismissed it as opportunistic.

BHP CEO Mike Henry and executives including chief financial officer Vandita Pant will be briefing investors next week, fund managers said. BHP did not immediately respond to a request for comment on the meetings.

A deal, if successful, would be the largest mining takeover globally in 2024 and in the top 10 largest deals for the sector ever, according to LSEG data.

Under its plan, BHP plans to spin out Anglo’s iron ore and platinum assets in South Africa, where BHP, the world’s largest listed miner, has no activities.