(Bloomberg) -- Anglo American Plc has rejected a $39 billion takeover proposal from BHP Group, saying it significantly undervalues the company.

Under the proposed all-share deal, Anglo would first spin off controlling stakes in South African platinum and iron ore companies to its shareholders before being acquired by BHP. The total per-share value of the non-binding proposal was about £25.08, BHP said Thursday.

“The BHP proposal is opportunistic and fails to value Anglo American’s prospects,” Anglo Chairman Stuart Chambers said in a statement.

Anglo’s rejection was widely expected. Analysts and some Anglo investors had seen BHP’s proposal as well below the sort of price that would bring the 107-year-old miner to the table. BHP will now have to improve its offer if it wants to start talks.

“To take control of one of the world’s great diversified mining houses, with an array of genuine Tier 1 assets,” the premium is far from credible, said Tim Elliott, portfolio manager & head of mining at Regal Funds Management Pty Ltd., which owns both BHP and Anglo shares. “I can’t imagine too many longer-term Anglo shareholders would take this initial offer seriously.”

Elliott made the comments just before Anglo rejected BHP’s proposal.

Read More: BHP Makes $39 Billion Anglo Approach to Create Mining Giant

Just two years ago, Anglo was trading at almost £43 a share, but it’s been battered by major operational and market setbacks. Anglo shares were little changed at £25.65 in London, after jumping 16% on Thursday.

A tie-up with Anglo would give BHP roughly 10% of global copper mine supply ahead of an expected shortage that many market watchers have predicted will send prices soaring. If successful, the transaction would mark a return to large-scale dealmaking for BHP, while potentially flushing out other suitors aiming to boost their exposure to the metal that’s closely linked to the global energy transition.

Anglo has long been viewed as a potential target among the largest miners, particularly because it owns attractive South American copper operations at a time when most of the industry is eager to add reserves and production. Still, suitors have been put off by Anglo’s complicated structure and mix of other commodities from platinum to diamonds, and especially its deep exposure to South Africa.

BHP had sought to navigate that challenge by insisting that Anglo separate its two South African units as a condition of a takeover.

That suggestion was also was also dismissed by Anglo on Friday, with the company saying it was unappealing to its investors.

“The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders,” Chambers said.

Within 24 hours of BHP’s pursuit coming to light, South Africa — as many have always expected in a deal involving Anglo — has started to move to center stage.

South Africa’s state owned pension fund is the Anglo’s biggest shareholder and yesterday the country’s mines minster signaled his opposition to the deal.

--With assistance from Sybilla Gross.

(Updates with investor comment in fifth paragraph)

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