Recasts, adds Anglo investor comment, Elliott raising Anglo holding, context on Anglo AGM, updates Anglo share price

By Clara Denina, Scott Murdoch and Melanie Burton

LONDON/SYDNEY, April 29 (Reuters) - Anglo American AAL.L needs to detail plans for improving its value in order to fend off BHP BHP.AX, which is privately talking to investors about a potential revised takeover bid, shareholders in both companies said on Monday.

The world's biggest listed mining group is weighing up its next move after an initial $39 billion gambit for its smaller competitor was rejected by Anglo last week.

"Anglo need to come out and explain to us how they're going to make this business more valuable," said George Cheveley, portfolio manager at Ninety-One.

"You've got the largest mining company (making an) approach, it's a credible approach. You might argue the structure is wrong, and they might be able to change that," he added.

While shareholders would be keen to hear details of Anglo's response to BHP's bid at its AGM, which kicks off at 1000 GMT on Tuesday in London, executives are unlikely to be able to discuss its plans due to restrictions in the UK Takeover Code beyond a repeat of the rejection, a source familiar with the matter said.

Anglo, which rejected BHP's bid on Friday as opportunistic, significantly undervaluing the miner and its future prospects, started a strategic review of its assets in February in response to a 94% fall in annual profit and a series of writedowns caused by lower commodity demand.

Much of the focus of BHP's bid has been on copper and two of its investors said they saw value in a deal given Anglo's quality assets and long-term price prospects of the metal which is central to the world's clean energy shift.

The investors, who declined to be named as the talks were private, said they would be open to BHP raising its offer.

"We are receptive to the deal. We potentially would be supportive if BHP raised their offer," said the first investor.

Meanwhile, activist investor Elliott Investment Management said in a filing it had raised its position in Anglo to 2.6%.

BHP adviser UBS UBSG.S has, in a parallel process, begun scheduling meetings with fund managers for this week, three sources with direct knowledge of the matter said.

These talks highlight the effort that BHP is making to fine tune a revised proposal for Anglo.

The meetings being sought by UBS will focus on gaining granular details on how BHP shareholders think a second bid should be structured, one of the sources said. That feedback would then be channelled back to BHP, the source added.

BHP and Anglo declined to comment. UBS did not immediately respond to a request for comment.

Anglo shares in London were up 2.8% to 27.16 pounds at 1333 GMT. This compared with BHP's bid price of 25.08 per share.

Shares in BHP closed 0.42% lower at A$42.97 ($28.17) in Australia.

($1 = 1.5253 Australian dollars)

(Reporting by Clara Denina and Pratima Desai in London, Scott Murdoch and Lewis Jackson in Sydney, Melanie Burton in Melbourne, Yadarisa Shabong in Bengaluru; Editing by Sumeet Chatterjee and Alexander Smith)

((Scott.Murdoch@thomsonreuters.com;))