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Anglo American Shares Rise on Takeover Rumors

Jun 17, 2008 3:58 AM   By Avi Krawitz
RAPAPORT... Anglo American shares spiked in London on Monday after rumors broke that Brazilian mining rival Vale is planning a takeover bid for the company.

The London Observer reported Sunday that Vale, the world’s largest producer of iron-ore, was interested in Anglo American for its portfolio of diamonds, gold, platinum and base metals such as zinc and copper.

Anglo American owns a 45 percent stake in De Beers, the world’s largest diamond producer.

The report cited unnamed “City sources” as saying that Anglo was looking to increase its exposure to iron-ore and coal, and that shareholders would be willing “to accept an offer if it is pitched high enough.” Anglo CEO, Cynthia Carroll, reportedly favors maintaining an independent company.

Vale would have to offer at least a 25 percent premium to Anglo's closing share price on Friday of GBP 31.89, the Observer commented. Anglo shares rose 4.6 percent from Friday to close at GBP 33.37 per share on Monday. The share rose to GBP 33.59 in early morning trade on Tuesday. The Johannesburg Stock Exchange was closed on Monday for a public holiday. 

The report comes three months after Vale’s failed $90 billion bid to buy Anglo-Swiss miner Xstrata, and a weel after Vale announced plans to sell about $15 billion in new shares to fund growth and finance future takeovers.

Anglo currently has a market capitalization of GBP 44.4 billion (about $87 billion.)
Tags: Anglo American, De Beers
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