Outlook: Will London buy the Oppenheimers?

PERHAPS JULIAN Ogilvie Thompson suffered a blinding flash on the road to Damascus or something, but the words used in yesterday's statement announcing the merger of Anglo American with Minorco and its shift of domicile from Johannesburg to London - "focused management and accountability, operational control of core assets, simplicity and transparency of structure" - are not those generally associated with the Oppenheimers' Byzantine corporate empire. Indeed, the two things would seem pretty much a contradiction in terms.

Still, everyone is entitled to change their tune and it is to achieve these aims that the Anglo American chairman is embarking on this ambitious restructuring. The key question is, will the London market buy it? Are British portfolio managers really going to want to be part of such a culturally opaque, family controlled, business dynasty? There may be a will to change, but old habits die hard.

The answer is that to some extent they will be forced to, regardless of their doubts, since once Anglo becomes a FTSE100 company, many institutions will be forced to hold shares in the company as a matter of indexing policy.

But there is also a less cynical case that deserves to be heard. In many respects, the complexity of the Oppenheimer empire, which also takes in the De Beers diamond cartel, is a throw back to the days of apartheid and sanctions. These barriers and obstructions were as much a cause of the present structural maze as the family's attempt to reconcile control with its appetite for outside sources of capital.

Today, we are dealing with the new, outward-looking South Africa. Much of the raison d'etre for the old structure has gone, and it acts only as a deterrent to international investors, confusing, obfuscating and guaranteeing that the shares trade on a big discount to the value of the underlying assets. Reform is a vital necessity, not just in the interests of shareholder value, but also in the wider interests of South Africa, for without access to international capital, South Africa is dead.

These proposals stop a long way short of disentangling the relationship with De Beers and the family in its entirety. Anglo will remain the creature of the Oppenheimer family, which will maintain control both directly and through the central cross shareholdings with De Beers. Come now. The Oppenheimers are a proud and ruthless family which has dominated the diamond cartel for more than 70 years. Players like these don't roll over so easily.

But the effect of the restructuring is to clean the whole thing up, make it transparent, and subject it to normal capital market disciplines and rules of accountability. Crucially, the De Beers interest in eight principle operating subsidiaries is bought out, as are the other minority interests.

As for the change in primary listing and domicile, some are bound to see this as a slap in the face for the new South Africa. Is this not the Oppenheimers finally deserting the velt? Possibly these arrangements do make it easier for the Oppenheimers and others to escape certain capital controls and taxes, but as the South African government itself seems to acknowledge by backing the proposals, that is not the primary purpose.

Rather it is to make Anglo American into a genuine international company. It is a tribute to the bravery and vision of the ruling African National Congress that it continues to adopt this enlightened, outward-looking approach to the world in the face of persistent speculative attacks on its economy and currency. There is an implicit recognition, which other emerging markets would do well to share, that in order to attract vital foreign capital into the country, South Africa is going to have to allow its companies to go out.

In the end, however, Anglo American will stand or fall as a British-listed company not on any goodwill the City may feel towards the new South Africa, but on its performance and assets. There is no doubt that many investors are going to feel highly uncomfortable with a family controlled FTSE 100 company, and one, moreover, which is controlled from overseas. There is only one other FTSE 100 company that fits this description - BSkyB. Even so, as the biggest gold, platinum and copper mining company in the world, Anglo should attract a rather better following than the disastrous Billiton.

Arts and Entertainment
Banksy's 'The Girl with the Pierced Eardrum' in Bristol
art'Girl with the Pierced Eardrum' followed hoax reports artist had been arrested and unveiled
Life and Style
tech

Board creates magnetic field to achieve lift

Voices
Stephanie first after her public appearance as a woman at Rad Fest 2014
voices

Arts and Entertainment
James Blunt's debut album Back to Bedlam shot him to fame in 2004
music

Singer says the track was 'force-fed down people's throats'

PROMOTED VIDEO
News
peopleJust weeks after he created dress for Alamuddin-Clooney wedding
Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010
films

George Lucas criticises the major Hollywood film studios

Sport
football West Brom vs Man Utd match report: Blind grabs point, but away form a problem for Van Gaal
Arts and Entertainment
Bloom Time: Mira Sorvino
tvMira Sorvino on leaving movie roles for 'The Intruders'
Arts and Entertainment
Leonardo DiCaprio talks during the press conference for the film
films

Film follows park rangers in the Congo

News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
News
i100
Sport
Adel Taraabt in action for QPR against West Ham earlier this month
footballQPR boss says midfielder is 'not fit to play football'
News
First woman: Valentina Tereshkova
peopleNASA guinea pig Kate Greene thinks it might fly
Voices
Chris Grayling, Justice Secretary: 'There are pressures which we are facing but there is not a crisis'
voices

Does Chris Grayling realise what a vague concept he is dealing with?

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Customer Service Executive / Inbound Customer Service Agent

£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

ASP.NET Web Developer / .NET Developer

£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album