Anglo tells Xstrata to ‘put up or shut up’

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Anglo American yesterday asked the Takeover Panel to instruct rival mining giant Xstrata to ‘put up or shut up’ over its nil premium, “merger of equals” approach, which it says is justified on cost savings alone.

Anglo’s new chairman Sir John Parker has the first two months of his tenure gauging shareholder reaction to the approach. Xstrata now has until 5pm October 20 to decide whether to reaffirm its interest, or walk away from the deal, a move that a number of analysts now say is likely.

Anglo’s board, led by chief executive Cynthia Carroll, has rejected the approach, news of which was leaked in June. Sir John Parker, Chairman of Anglo American said: “Having reviewed with management and advisors the value creation potential at Anglo American relative to Xstrata’s merger proposal and having met our shareholders in the UK, South Africa and USA, we have reaffirmed our conclusion that Xstrata’s proposal is not in the interests of our shareholders. We have made our position on Xstrata’s proposal very clear and we welcome the Panel’s decision today.”

If Xstrata decided to walk away from the deal, it will be prevented from approaching Anglo for six months. The Anglo-Swiss group said yesterday that it had noted the move by the Takeover Panel and would respond by the deadline. It has argued that the companies’ assets compliment each other and by having a range of commodities, it would help a combined group deal with volatile metal prices. Anglo has rejected this argument and says it has a better range of assets than its suitor.