May 25 (Reuters) - Anglo American was encouraged

by key shareholders including BlackRock ( BLK ) to continue

engaging in talks with BHP Group ( BHP ) over its proposed 38.6

billion pound ($49.18 billion) mining merger, a person familiar

with the matter told Reuters on Saturday.

BHP, the world's biggest listed mining group, now has until

May 29 to make a firm bid for Anglo American or it will be

forced to walk away for at least six months under the UK's

takeover rules after it was granted a one-week extension on

Wednesday.

BlackRock ( BLK ) was among a handful of investors that encouraged

meaningful negotiations with BHP, said the Financial Times,

which reported the news first.

Two other significant shareholders, Ninety One and Sanlam

Investments, also backed the decision to extend talks, despite

concerns about a deal structure that requires Anglo to spin off

its stakes in its South African platinum and iron ore units, the

newspaper added.

Ninety One and Sanlam Investments did not respond to a

Reuters' request for comment.

U.S.-based asset manager BlackRock ( BLK ) owns a 9.6% stake in

Anglo, according to LSEG data, and is also a BHP shareholder.

BHP will stand firm on the structure and value of its latest

takeover proposal, focusing instead on allaying its target's

concerns around execution risks over the coming week, Reuters

reported on Thursday.

The FT said that according to people familiar with BHP's

thinking, there was only scope for "smaller, creative structures

to better share the risks".

However, people close to Anglo cited by the newspaper said

the structure needs altering or BHP must pay more.

Anglo American declined to comment on the FT report, while

BHP Group ( BHP ) and BlackRock ( BLK ) did not respond to requests for comment.

($1 = 0.7849 pounds)