The global mining industry is braced for a multi-billion pound bidding war for Anglo American amid growing speculation that mining companies are preparing rival bids.
The Australian miner BHP is understood to have sent senior executives to Anglo’s base in South Africa to meet key company stakeholders after an initial offer of £31bn was rebuffed by Anglo’s board last week.
A revised bid from BHP is expected to face competition from Swiss mining company Glencore, which is understood to be considering its own approach.
Meanwhile, the British-Australian miner Rio Tinto has also been linked to the multi-billion pound tug-of-war over Anglo’s vast reserves of copper, a key building block of low-carbon technologies including solar farms and electric vehicles.
The market speculation prompted a 3% jump in Anglo’s share price on Friday, making it the top riser on the FTSE 100 and helping to drive the index to an all-time high of 8,215 points.
Anglo’s share price rise gives the miner a market valuation of about £37bn, well above the proposed takeover price offered by the Australian miner BHP, which was rejected by Anglo’s board last week as an “opportunistic” and “unattractive” offer.
Industry analysts at Jefferies said this week that they expected BHP to return to the bargaining table with a “sweetened offer” but added that they “would be surprised if other bidders didn’t emerge”.
One industry source said: “Glencore is definitely looking at an Anglo bid. There is no doubt that banks are already advising on what structure and price might make sense for them. I really can’t see them not doing anything.”
A spokesperson for Glencore said the company did not comment on “market rumour or speculation”.
The source added that Anglo was also likely to attract interest from Rio Tinto, which could set the stage for a three-way bidding war for the 107-year-old company. “This has a long way to run,” the source said. “It will take some time.”
The Rio chair Dominic Barton remained tight-lipped on whether the company was considering making a play for Anglo when questioned during the company’s annual general meeting in Brisbane on Thursday.
“Our policy is that we don’t speculate or comment on M&A activity. So that would be my comment,” Barton said.
The Anglo chair, Stuart Chambers, was also constrained from commenting directly on the takeover speculation at the company’s annual shareholder meeting on Tuesday. But he signalled that the board expected further offers for the company.
“It’s the shareholders who will decide whether they believe the offer should be accepted or not,” he told the AGM in London. “The board doesn’t buy or sell the company – the shareholders decide.”.
Chambers said he would be meeting with Anglo’s largest shareholders “and listening very carefully” to “hear what they feel” about the future of the company.
Glencore and Rio could prove to be a better fit for Anglo than BHP, which made clear in its approach that the takeover would require Anglo to spin off some of its South African businesses, including the Kumba iron ore mine and Anglo’s platinum business, Amplats.
The BHP approach received a frosty reception in South Africa, which is Anglo’s largest shareholder through its Public Investment Corporation and home to many of its mines.
Christopher LaFemina, an analyst at Jefferies, said last week: “Unlike BHP, Glencore could benefit from keeping Kumba and marketing iron ore, and Glencore may face less political pushback in South Africa, especially if it were to propose a straightforward all-share deal that does not include Kumba and Amplats demergers.”
Rio was approached for comment. Anglo declined to comment.
