Anil Agarwal. Picture: SUPPLIED
Anil Agarwal. Picture: SUPPLIED

Anglo American will soon have a new dominant shareholder after Indian billionaire Anil Agarwal’s family owned Volcan Investments said it would top up its 12.43% holding in the diversified miner by a further £1.25bn to £1.5bn.

At prevailing prices this would take Volcan’s stake to 20%, but the company, which is issuing a bond to pay for the shares, insisted this was not a takeover play for the miner of platinum, diamonds, copper and bulk commodities such as iron ore, coal and manganese.

"In relation to the UK takeover code, Volcan confirms it does not intend to make an offer to acquire Anglo American plc. Accordingly, Volcan and all persons acting in concert with Volcan, including Vedanta Resources plc, will be bound by the restrictions in rule 2.8 of the code," Volcan said in a statement on Wednesday evening.

Under UK laws, a share holding of 30% triggers a takeover offer

Anglo declined any comment on the latest announcement from Volcan.

Volcan’s wholly owned subsidiary, Volcan Holdings II, will issue a three-year mandatory exchangeable bond in London, led by JP Morgan as the sole bookrunner.

The coupon on the bonds would be set in London later on Wednesday.

The bond, which will be issued on October 10, would be secured against Anglo shares owned by Volcan. Volcan said it would buy Anglo’s shares in the market "via a combination of purchases from investors in the mandatory exchangeable bond and on market purchases, subject to certain conditions, until or close to the closing date".

Agarwal has said in the past that he favours Anglo’s asset suite and exposure to SA where Vedanta, which is a diversified Indian mining company 69% owned by Volcan, has zinc mines which were once owned by Anglo.

In March, Agarwal caused a ripple of excitement among Anglo American investors, spending £2bn to buy the 12.43% stake. It prompted widespread speculation on what exactly his intentions with Anglo were, after it had undergone a hefty restructuring and debt reduction programme. "We are encouraged by the performance of Anglo American since our original investment earlier this year.

"The company has made good progress in its operational and financial performance and remains an attractive investment for our family trust," Agarwal said.

Agarwal has to date refused to take a seat on Anglo’s board and it is not clear whether as a one-fifth holder of the company he would want some say in its strategy and direction.

He has in the past spoken of wanting to merge assets owned by Vedanta with Anglo, a suggestion Anglo has rejected.

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