Anglo American CEO Duncan Wanblad met with South African Mines Minister Gwede Mantashe on Friday, which is a big development. This discussion takes place not long after Anglo American turned down a big buyout offer of $39 billion from BHP Group, the biggest publicly traded mining company in the world. This is their first meeting since the bid was made public, according to people with knowledge of the matter.
The mining industry may see further developments as a result of Anglo rejecting BHP’s offer. In an effort to simplify its South African holdings, BHP had recommended that Anglo sell its interests in Kumba Iron Ore and Anglo Platinum (Amplats). Anglo, on the other hand, rejected the deal, calling it opportunistic and a major undervaluation of the business and its future.
The giant of the commodities market Glencore is apparently exploring a bid for Anglo in the midst of these corporate actions, raising the prospect of a bidding fight for the century-old mining company. The stakes have increased as a result of this information because several significant mining companies may be considering expanding or consolidating their holdings through Anglo’s profitable properties.
Anglo has not formally commented on the details of the meeting with Minister Mantashe, but there are a lot of effects from these high-level discussions, especially when it comes to government and regulatory viewpoints on the acquisition proposals. It is rumored that the central bank and other regulatory bodies in South Africa are worried about possible capital outflows in the event that foreign investors choose to leave the South African companies after the takeover.
BHP CEO Mike Henry is reportedly in “listening only mode” while he meets with investors in South Africa to see how they would react to the potential deal. This tactic was on display at a meeting with a Cape Town-based fund manager, indicating a cautious approach as BHP considers what to do after the initial refusal. Moreover, BHP representatives met with the Public Investment Corporation of South Africa earlier this week, highlighting the extent of BHP’s endeavors to obtain support for its acquisition plan.
Anglo is proactively reaching out to its principal investors in order to talk about the ramifications of BHP’s strategy and probably plan the best course of action going forward. These meetings are important because they will determine how the company will communicate with shareholders who are concerned about the possible unbundling of important South African assets and how it would defend itself against the takeover.
