Anglo American’s efforts to maintain its independence have been boosted by an Australian miner’s interest in purchasing the company’s stakes in two manganese mining operations.
The FTSE 100 company is trying to simplify its operations to ward off a takeover bid from BHP. Anglo American rejected BHP ‘s third and improved offer of £29.34 per share, or £38 billion, which was an improvement from the earlier proposal.
South32, an Australian miner with a diverse portfolio, said that it was open to purchasing Anglo American’s portion of the manganese operation, which the two companies jointly own. Graham Kerr is the South32 chief executive. He said, “At the best price, yes.” We know them more than anyone.
Anglo American, in its bid to maintain its independence, has laid out plans for the breakup of its company. It has proposed spinning off or selling its steelmaking coal business and its platinum and diamonds operations. The group could then focus on its copper-mining operations in Peru or Chile, where it can extract about 760,000 tonnes per year.
Investors are increasingly choosing copper as the metal to invest in. It is used for a variety of “green” technologies such as electric vehicles, windmills, and energy networks. Copper assets are being sought by mining groups.
BHP’s deal on paper would give Anglo shareholders a 17.8% stake in the expanded company, which represents a 47.5% premium over the share price of the group. The offer is contingent on the spin-off of Anglo American’s South African iron ore mining and platinum mining operations. Mike Henry, BHP’s boss, said that the higher price was the “final” approach.
Dawid Heyl is a portfolio manager for Ninety One. Ninety One is a top 10 Anglo shareholder. He said: “For Anglo shareholders it was a very welcome development. My base case remains that there has been an agreement and they only have to work out the structure. I believe we are getting closer to the right price. “I think it’s more the structure that is a problem.”
Stuart Chambers, Anglo American chairman aged 67, stated that the revised deal “did not meet expectations for value delivered to Anglo American shareholders”.
The group wants to concentrate on copper mining and is looking at a possible stock market listing of De Beers.
Duncan Wanblad (57), Anglo American’s chief executive, stated that the group is “evaluating all options” to exit De Beers. This includes a stock-market flotation. Botswana’s government, which holds a 15% stake in De Beers, will be expected to participate in the discussions.
Anglo American will also slow the development of its polyhalite mine, worth $9 billion in North Yorkshire. It wants to sell its Amplats Platinum Mining operations and its Steelmaking Coal Business. The company said that there was “strong buyer interest” for both.
Capital expenditure on the project will be reduced to $200 million by 2025, and then to zero in 2026. The group had originally planned to spend $1billion.
Legal & General Investment Management (a major Anglo American shareholder, with a stake in the company of 1.8%) supported this week’s plans for dissolution. Anglo American shares fell by 53p or 2 percent to £26.451/2.
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