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Anglo American was at the top of the FTSE 100 Wednesday rankings on reports of interest in a possible deal of Indian metals tycoon Anil Agarwal.
London-listed miner shares rose 4 percent to more than 1,700 p After a report in Mint, an Indian business daily, Agarwal was working on a Vedanta Resource merger project with South American activities. African Anglo via an exchange of shares.
The report arrives a few days after Mr. Agarwal's family trust has an offer of £ 800m for the 33.5% of Vedanta Resources that he does not already own.
"The merger of Vedanta Resources and Anglo American South African will create an entity valued at $ 7 billion and will ultimately give Volcan Investments control of the entity," the report says, citing two people not identified in the plan. The idea is to buy back the public shares of Vedanta Resources first, which will reduce the costs of registration and simplify the holding structure, "the report says.
"The second step of the strategy is to take over Anglo American SA so that the economic interest of Volcano further increases in the company and can profit from the growth of Anglo. step, one option is to list the merged entity, which will ultimately benefit all stakeholders. "
Many London-based badysts were wary of the report and said it was difficult to see how Mr. Agarwal would conclude a transaction. even with the interest of 20 percent that he ambaded at Anglo via Volcano.
Others noted that Anglo's holdings in Kumba, an iron ore miner, and Anglo Platinum were worth nearly $ 11 billion and that the South African firm of 39; Anglo n has issued no shares that can be used as currency in a merger.
"We are deeply skeptical, Agarwal may hold 20% of Anglo 's voting rights, but it would be powerless to act on this because it would be a transaction between Related parties, "said Hunter Hillcoat, an badyst at Investec Securities.
" Why would other shareholders want to dilute their property with an Indian company with all its own issues and complexities? Why would they do this while South Africa remains an important source of cash flow (supporting Anglo PLC dividends), while the company has increasing capital requirements. "19659002" Moreover, Anglo South Africa does not own De Beers. "Mr. Hillcoat
Traders have said that a more likely deal would be a merger with Vedanta Limited, although this is still fraught with complexities.
million. Agarwal wants to make its Vedanta group of companies an Indian version of BHP Billiton, the world's largest natural resource company.
The acquisition of Vedanta Resource aims to simplify its sprawling business empire and consolidate all its interests in Vedanta Limited, which is listed in India and whose market value is $ 12.5 billion.
Vedanta refused to comment on the report.
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