In theory, Anglo American has been a sitting duck for a takeover bid for about a decade. Its share price has lagged behind that of other big miners and successive efforts to sharpen a sprawling portfolio have underwhelmed. The last news, at the end of 2023, was production delays that sent the shares down 20% in a day.

In practice, the same complexities, plus deep entanglement in South African politics, have served as a deterrent to a bid. Anglo was seen as too fiddly. But here comes BHP, the Australian giant of the sector, with a proposal to cut through the noise and get to the assets it would like to own, primarily Anglo’s copper mines in Peru and Chile and, to a lesser extent, its iron ore projects in Brazil and metallurgical coal in Queensland.

The takeover idea is certainly clever. Anglo would have to demerge its two big South African units that already have separate listings in Johannesburg, Anglo American Platinum and the local iron ore producer Kumba, by distributing the shares to its own shareholders. Then BHP would buy the rest of Anglo via an all-share offer. Add it all up and BHP presented its £31bn proposal as being pitched at a 31% premium for the Anglo assets that don’t have their own listings.

In reality, few will look at the numbers that way. BHP’s own description of the “total value” of its proposal as being £25.08 a share (with the listed parts included at £8.26) implied only a 13% premium to Anglo’s closing share price on Wednesday of £22-ish. Indeed, the offer was a bit less than £25 because BHP’s own shares fell slightly.

Thus the many Anglo shareholders, including Legal & General Investment Management (LGIM) and Abrdn, who called BHP’s offer “opportunistic” are correct. A £25 offer is clearly too mean. For all its calamitous recent history, Anglo should be able to get back £30 under its own steam via self-improvement. Its shares stood at £36 as recently as January last year. Note, too, that BHP has made its move when the price of diamonds (Anglo owns 85% of De Beers) and platinum are at cyclical lows.

One must assume BHP expected such a reaction from the ranks of Anglo shareholders, so its first shot was probably a sighter. It will need to go higher if it wants to continue the pursuit. But, if the target is up for grabs, all sorts of possibilities come into play. There’s nothing to stop Anglo breaking itself up, for example. And, if it were prepared to let go of the prized copper mines on their own, there’d be a queue of potential bidders. BHP couldn’t be surprised by such a development either: if you make a proposal that amounts to “we’d like to buy you, except for the bits we don’t like”, others are free to riff on the idea.

The other consideration here is the non-financial one: would a BHP purchase of two-thirds of Anglo be desirable for the rest of us? That is really a copper question since the metal is critical to electrification, and thus to the transition of the world’s energy system towards lower-carbon generation. “The [mining] industry is extremely concentrated today, and further consolidating it will not contribute to accelerating investment in the way we believe is needed,” said LGIM.

Again, that’s a fair point. BHP is currently number three in copper globally and would become number one with the addition of Anglo’s mines. A global market share of 10%-ish may not sound enormous, but a BHP-Anglo deal would probably spark consolidation elsewhere. In the end, you get fewer but larger miners – especially of the type that are western-facing and can be vaguely held to account by virtue of having a stock market listing.

That competition question, though, is the one after the current one. On the first day of a takeover tale that probably has a long way to run, the jump in Anglo’s share price to £25.60 told the story: BHP needs to improve its offer.