Anglo American Shares Rise After Being Tipped for Takeover
11 December 2023 - 11:54PM
Dow Jones News
By Christian Moess Laursen
Shares in Anglo American rose on Monday after being tipped by
analysts for a takeover if its doesn't turn operations around and
its share price continues to lag.
At 1213 GMT, shares were up 1.6% at 1.831,20, having risen as
high as 1.862,20. The FTSE 100 is down 0.5%.
On Friday, the diversified miner shook the market when it cut
its production guidance for the coming years, by 4% in 2024 and by
a further 3% in 2025, citing operational issues at its Los Bronces
copper miner in Chile and persistent logistical woes at its Kumba
iron mine in South Africa.
Shares tumbled 16% on the news, adding to an already
underperforming share price year-to-date, down 43% amid continuing
market volatility and low demand for platinum metals and diamonds.
Prices in the latter have plummeted, with futures down 15% in 2023
so far.
If Anglo American doesn't turn things around operationally and
its share price continues to lag, Jefferies analysts "cannot rule
out the possibility that Anglo is involved in the broader trend of
industry consolidation," they said in a research note.
They noted that Xstrata, when it was 35% owned by Glencore,
proposed a merger with Anglo American in 2009.
"Glencore's strategic fit [after its deal to buy the coal assets
of Canadian miner Teck Resources] appears even stronger now due to
operating synergies, even greater marketing benefits, and a cost of
capital arbitrage," they said.
"We need to consider [the possibility of a takeover] as part of
the Anglo investment case at this point," the analysts added.
The global miner has seen its markets share diminish by 33
billion pounds ($41.41 billion) since Chief Executive Duncan
Wanblad took the reins in April 2022.
Representatives from both Glencore and Anglo American declined
to comment when contacted by Dow Jones Newswires.
Write to Christian Moess Laursen at christian.moess@wsj.com
(END) Dow Jones Newswires
December 11, 2023 07:39 ET (12:39 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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