Anglo American announced a plan on May 14 to spin off its less profitable coal, nickel, diamond, and platinum businesses to refocus on the copper business, Reuters reported, a move to defend BHP's takeover offer.

When these assets are spun off, the group would reduce costs by $1.7 billion, Anglo said. The proposed break-up plan includes a platinum unit in South Africa, causing alarm in the country as unemployment and a stagnant economy are major issues ahead of a May 29 election.

A day ago, Anglo rejected BHP's new bid of $42.7 billion, which increased from the initial $39.1 billion in late April, saying it remained a significant undervaluation of the company's prospects.

In the previous two offers, BHP required Anglo American to sell platinum and iron ore assets in South Africa.

However, under the Anglo's self-help plan, the Kumba Iron Ore will be retained in its asset portfolio, and the divestment of Anglo American Platinum would be completely different in terms of time and complexity from the BHP proposal.

The new plan addressed concerns that Anglo's copper mines have been undervalued by BHP due to less profitable operations. This means there is still an opportunity for BHP to raise offer to sweeten the pot.

(Writing by Alex Guo  Editing by Harry Huo)
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