Investors give a lukewarm reaction to Anglo American’s plan to prevent takeover by BHP
FTSE 100 mining giant Anglo American has announced plans to break itself up in an effort to prevent a takeover bid from Australian rival BHP. The company revealed that it would sell or demerge its stake in De Beers, the world’s largest diamond miner, as well as its thermal coal assets and shareholding in Anglo American Platinum.
The decision comes after Anglo rejected a £34bn bid from BHP, stating that it significantly undervalued the company and was not attractive to its shareholders. The company plans to focus on its copper, iron ore, and crop nutrient assets in the future, with CEO Duncan Wanbled emphasizing the potential for cost reduction and operational performance improvement.
Despite the strategic shift, Anglo American’s shares dropped more than 2.5% following the announcement, indicating that investors were not fully convinced by the company’s new direction. The move also raised questions about why it took a takeover approach to prompt such a radical action, especially after a significant drop in annual profit earlier in the year.
Investors and analysts have been closely monitoring the situation, with some expressing skepticism about the company’s plan and its potential impact on shareholder value. The market reaction suggests that Anglo American still has work to do to win over its shareholders and demonstrate the long-term benefits of its restructuring efforts.