Top Anglo shareholder backs break-up plan as BHP deadline looms
The strategy is a radical but attractive one to create value for long-term investors, says Nick Stansbury, head of climate solutions
20 May 2024 - 20:11
byClara Denina and Sinead Cruise
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Logo of Anglo American on a jacket of an employee of the Los Bronces copper mine, in the outskirts of Santiago, Chile, March 14, 2019. Picture: REUTERS/RODRIGO GARRIGO
Anglo American shareholder Legal & General Investment Management (LGIM) supports the break-up plan announced by the company last week, it said on Monday, as the deadline approaches for BHP Group to log a formal takeover offer.
The radical plan to divest Anglo’s less profitable coal, nickel, diamond and platinum businesses followed its rejection of two all-share takeover approaches from BHP, the world’s biggest listed mining group, which had proposed a $43bn deal on the condition that Anglo first spins off its SA operations.
“The plan outlined by Anglo American is a radical but attractive strategy to create value for long-term investors,” said Nick Stansbury, head of climate solutions at LGIM.
LGIM is among Anglo’s biggest investors with a stake of about 2%, LSEG data shows.
“The execution of this plan will be challenging for management to deliver, but we are confident in their ability to do so over time,” Stansbury added.
Under UK takeover rules, BHP has until 5pm GMT (7pm) on Wednesday to make a binding bid for Anglo or it will be forced to walk away for at least six months. If the companies find an agreement in the meantime, an extension can be granted.
Anglo American and BHP Group declined to comment.
BHP CEO Mike Henry told investors last week that Anglo shareholders should consider the benefits of a combination of the two companies and which team they think has a better track record of executing projects and delivering returns.
Henry also said he was disappointed with the Anglo board’s continued refusal to engage.
“Our discussions with Anglo American indicate that their board are acting appropriately with regards to the level of engagement they are having with BHP,” Stansbury said.
LGIM does not see a clear reason for the Anglo board to change stance unless BHP offers a reasonable premium to the underlying fair value of Anglo’s assets, he added.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Top Anglo shareholder backs break-up plan as BHP deadline looms
The strategy is a radical but attractive one to create value for long-term investors, says Nick Stansbury, head of climate solutions
Anglo American shareholder Legal & General Investment Management (LGIM) supports the break-up plan announced by the company last week, it said on Monday, as the deadline approaches for BHP Group to log a formal takeover offer.
The radical plan to divest Anglo’s less profitable coal, nickel, diamond and platinum businesses followed its rejection of two all-share takeover approaches from BHP, the world’s biggest listed mining group, which had proposed a $43bn deal on the condition that Anglo first spins off its SA operations.
“The plan outlined by Anglo American is a radical but attractive strategy to create value for long-term investors,” said Nick Stansbury, head of climate solutions at LGIM.
LGIM is among Anglo’s biggest investors with a stake of about 2%, LSEG data shows.
“The execution of this plan will be challenging for management to deliver, but we are confident in their ability to do so over time,” Stansbury added.
Under UK takeover rules, BHP has until 5pm GMT (7pm) on Wednesday to make a binding bid for Anglo or it will be forced to walk away for at least six months. If the companies find an agreement in the meantime, an extension can be granted.
Anglo American and BHP Group declined to comment.
BHP CEO Mike Henry told investors last week that Anglo shareholders should consider the benefits of a combination of the two companies and which team they think has a better track record of executing projects and delivering returns.
Henry also said he was disappointed with the Anglo board’s continued refusal to engage.
“Our discussions with Anglo American indicate that their board are acting appropriately with regards to the level of engagement they are having with BHP,” Stansbury said.
LGIM does not see a clear reason for the Anglo board to change stance unless BHP offers a reasonable premium to the underlying fair value of Anglo’s assets, he added.
Reuters
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