After rejecting a second takeover bid from BHP, mining peer Anglo American unveiled on Tuesday plans to divest or demerge its diamond, platinum, steelmaking coal, and nickel businesses as it seeks to radically simplify its portfolio to focus on its copper, premium iron ore, and crop nutrients assets.
Anglo American, which has been a target of two unsolicited takeover bids from BHP - both rejected - is now looking to unlock significant value from its portfolio and accelerate the delivery of "consistently stronger shareholder returns" via sales or demergers of Anglo American Platinum and the diamond business De Beers, as well as the nickel and steelmaking coal assets.
"We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction," Anglo American chief executive Duncan Wanblad said in a statement.
Anglo American's investors expected the mining group to present its own plan on how to boost shareholder returns and unlock more value from the business after the company rejected in the past weeks two separate takeover offers from BHP which would create a major mining group.
Anglo American rebuffed the second offer on Monday, saying that its board "concluded that it continues to significantly undervalue Anglo American and its future prospects."
Both offers from BHP were highly conditional and required for Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American shareholders. The all-share offer and required demergers would be inter-conditional.
"Aside from significantly undervaluing Anglo American, the Latest Proposal continues to contemplate a structure which the Board believes is highly unattractive for Anglo American's shareholders, given the uncertainty and complexity inherent, and significant execution risks," Anglo American said on Monday, announcing it had rejected the second offer from BHP.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More