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.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

Recruitment Genius: Operations Manager

£30000 - £38000 per annum: Recruitment Genius: They are a financial services c...

Guru Careers: Stockbroker

£Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence