(Bloomberg) -- Anglo American Plc’s second-largest shareholder said BHP Group’s takeover offer for the miner needs “meaningful revision,” in public comments issued just hours before a deadline for the bigger company to commit to an offer or walk away. 

South Africa’s state-owned Public Investment Corp., which owns shares in both companies, said it “believes offers from BHP should reflect both the embedded value of existing Anglo assets and the future optionality and benefits that BHP can derive, specifically from Anglo’s unlisted assets.”

The authorities in South Africa – where Anglo was founded by Ernest Oppenheimer in 1917 and still mines platinum, iron ore, diamonds and manganese – will have a significant role to play if the two companies attempt to execute a deal. As well as owning 7.4% of Anglo via the PIC, state bodies would likely need to approve potential demergers of subsidiaries and the top-level transaction.  

A satisfactory offer “would require a meaningful revision of the current BHP proposal that should take into consideration the material risks that current shareholders of both Anglo and its subsidiaries would have to assume over an extended time frame,” PIC Chief Executive Officer Abel Sithole said in a statement on Wednesday. The PIC said it will continue to engage with both companies. 

Read: BHP Debates Improved Anglo Bid as Time Runs Out in Takeover Saga

Anglo has twice rebuffed BHP proposals for the smaller company to spin off the stakes in its listed South African iron ore and platinum companies before being acquired, arguing that the offers were too low and difficult to implement. Under the current structure, the only South African assets joining the BHP portfolio would be a minority stake in a manganese joint venture and some operations in the De Beers diamond business.

In recent years, Anglo has accumulated assets overseas including the South American copper projects that are so coveted by BHP. 

Anglo has announced its own turnaround plan that will see the firm exit platinum and diamond mines in South Africa, while retaining its Kumba iron ore unit in the country. That would leave the company focused on copper and iron ore.

The PIC, which manages the pensions of government workers, said it “recognizes the positive impact of Anglo American in the South African economy and the region at large, and the company’s role in this regard should not be diminished as a result of the proposed offer by BHP.” 

BlackRock Inc. is Anglo’s largest shareholder with 10.5%. The PIC also holds a 0.9% stake in BHP.

--With assistance from Janice Kew.

(Updates with background on South Africa from third paragraph)

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