Billionaire Agarwal Plans to Buy $2.4 Billion Anglo Stake – by Ruth David, Dinesh Nair and Thomas Biesheuvel (Bloomberg News – March 15, 2017)

https://www.bloomberg.com/

Anil Agarwal, an Indian mining billionaire, plans to buy as much as 2 billion pounds ($2.4 billion) of Anglo American Plc shares in the market after a merger proposal failed last year.

The full stake would equate to about 13 percent of Anglo’s stock, making Agarwal the second-largest shareholder after South Africa’s Public Investment Corp. It will give him a strong voice in the company’s strategy as the blue-chip British mining firm cements its recovery from a slump in commodity prices.

While Agarwal said the purchase was a family investment and he won’t make a takeover bid, the brash Indian tycoon offered to merge part his mining empire with Anglo American last year, only to be rebuffed. The London-based mining group, which is currently looking for a new chairman, is seen as a candidate for a potential break-up through splitting its South African assets from the global mining business.

“It gives him an extremely good seat at the table if there is going to be any corporate activity,” said Jeremy Wrathall, head of mining research at Investec Plc. “We expect that M&A is going to be the next phase and maybe this is firing the starting gun.”

The purchase will be funded via a mandatory exchangeable bond issued by his holding company, Volcan Investments Ltd., and secured by Anglo’s shares, the investor said in a statement on Wednesday. A representative for Anglo American declined to comment.

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