Anglo American on Wednesday agreed to continue talks with BHP over a potential takeover, although it rejected a third offer for £38.6 billion ($49 billion).

The Australian mining giant on May 20 tabled what it calls a “final offer,” which valued Anglo’s shares at £29.34 based on the closing price on 23 April. BHP’s previous offer valued the company at £27.53/share (or £34 billion), up from the original offer of £25/share (or £31 billion).

Anglo rejected the third offer, saying it does not “meet the expectations” of its shareholders and that the board continues to have “serious concerns” about the deal structure. The proposal requires Anglo to sell its stakes in Anglo American Platinum and Kumba Iron Ore assets in South Africa to its shareholders – a structure Anglo believes will lead to “material completion risk” and “value impact.”

“However, the board is willing to continue to engage with BHP and its advisers on this topic and has therefore requested a one-week extension to the PUSU [put up or shut up] deadline which has been consented to by the panel,” Stuart Chambers, chairman of Anglo American, says in a regulatory filing.

Kallanish understands that BHP was granted the extension to make a formal bid by 5pm UK time on 29 May. The PUSU is a legal requirement under the UK Takeover Code.

In a separate statement, BHP said its all-share offer, valuing Anglo at £31.11/share based on the 22 May BHP closing price, is a “final offer ratio.” The miner added that the offer could be increased under certain conditions, including a rival bid from another company, or Anglo’s board recommending a better offer.

Anglo agreeing to engage with BHP signals a deal could potentially go through, which would see the creation of the world’s largest copper producer with about 10% market share.

“These are encouraging steps as we would expect further discussions to lead to a recommended offer from BHP that could include a possible change in deal structure,” Jefferies analysts wrote in a note. “An Anglo-BHP deal has become more likely, in our view.”

The analysts believe BHP could either “modestly” raise its offer or agree to change the current proposed structure – or even do both. There is still potential for a bid emerging from a rival company.

“We have long believed that Glencore and Anglo make a compelling strategic combination, and it would be a surprise to us if BHP acquires Anglo without Glencore at least attempting to get involved in some way, shape, or form,” they add.