Anglo American has declined a third takeover proposal from BHP (ASX: BHP) on Wednesday, which valued the company at $49.2 billion (£38.6bn). However, Anglo American has agreed to extend the deadline for BHP, the world's largest miner, to present a formal offer.

BHP now has until May 29 at 5pm GMT to submit a binding bid for its smaller competitor. Concurrently, Anglo American is pursuing a significant business transformation, planning to divest its less profitable coal, nickel, diamond, and platinum units.

The latest offer, already dismissed by Anglo American, assessed the company's shares at £29.34 based on the April 23 closing price. This valuation represents a 47% premium on the stock value, as stated by BHP.

BHP's CEO, Mike Henry, emphasized that the revised proposal would grant Anglo American shareholders 17.8% ownership in the combined entity. He underscored BHP's commitment to a disciplined approach to mergers and acquisitions, prioritizing long-term value creation.

Anglo American reiterated its reservations regarding the structure demanded by BHP. The company expressed concerns that the proposed arrangement could pose significant completion risk and disproportionately affect Anglo American's shareholders.

Earlier in the day, the Public Investment Corporation (PIC), a South African state-owned asset manager and Anglo American's second-largest investor, urged the target company to thoroughly reconsider BHP's proposals.