Duncan Wanblad, the chief executive of Anglo American, says he wants to end talks with BHP, the company’s rejected bidder, so he can “crack on” with his own proposal to restructure the miner and boost profits.
In addition, he expressed to AFR Weekend his expectation that Anglo American would not draw in a rival bid while he concentrated on selling the assets crucial to his turnaround plan—diamond, platinum, nickel, and Queensland coking coal. The Anglo American board’s belief that it is better off alone is supported by these divestiture activities, which are “starting right now,” he said. No advisers had been named yet.
Anglo American appears to be attempting to put a stop to BHP’s $75 billion offer, which fell apart this week after the target company, listed in London, declined to grant BHP another extension of time to continue negotiations, as indicated by Mr. Wanblad’s remarks. BHP is not permitted to make another offer under British takeover legislation until November at the latest, unless Anglo American reopens the talks, “material circumstances change,” or a bidding war occurs. Yet, Mr. Wanblad expressed his hope that similar incidents would not occur.
The CEO of Anglo American said, “No,” when asked if BHP would be invited back to the table. I’m working quickly to achieve what I believe will be excellent for shareholders.
Regarding the possibility of other unsolicited bids, he stated: “I do hope, absolutely, that there isn’t another one, for sure.” Glencore has been mentioned as a possible rival of BHP. My whole attention is on implementing the plan. I’m focusing all of my energy there.
Following BHP’s proposal to separate Anglo American’s operations in platinum, diamonds, and iron ore, the target announced its own restructuring plan, stating that it will withdraw from coal, diamonds, nickel, and platinum over the following 18 to 24 months.
“On each of those four divestitures or demergers, we are initiating the necessary procedures. And that’s what we’re doing now. Speaking on Thursday, he continued, “We’re going to start running all of them in parallel with each other (Friday AEST).”
Based on papers submitted to the Australian Securities and Investments Commission, the Queensland coking coal mines produced a net profit of $999 million in 2018 and over $2.8 billion in 2017. According to CreditSights, a branch of Fitch Ratings, Anglo might get $US4.6 billion ($6.9 billion) in exchange for the coal assets.
As Mr. Wanblad has already stated, there are already bidders that are interested in the coal assets in Queensland, and this sale may happen “rapidly.” Now, that field is wider.
“We’d had quite a bit of incoming interest, certainly from the time that we announced the strategic portfolio review [in December],” he said when we unveiled the [restructure strategy] a few weeks ago.
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