The mining company Glencore is considering making a takeover offer for Anglo American that could trigger a multibillion-pound bidding war for the company, according to reports.
It sparked a 3% jump in Anglo American’s share price on Friday, making it the top riser on the FTSE 100 and helping to drive the index to an all-time high of 8,215 points.
Anglo’s share price rise gives the miner a market valuation of about £37bn, well above the proposed £31bn takeover price offered by the Australian miner BHP, which was rejected by Anglo’s board last week as an “opportunistic” and “unattractive” offer.
Although Switzerland’s Glencore is understood to be considering a rival bid for the company, it is not guaranteed that it will make an approach, according to Reuters, which first reported the story.
One industry source told the Guardian: “Glencore is definitely looking at an Anglo bid. There is no doubt that banks are already advising on what structure and price might make sense for them. I really can’t see them not doing anything.”
The source added that Anglo is likely to receive an improved offer from BHP and is also expected to attract interest from the UK-Australian miner Rio Tinto, which could set the stage for a three-way bidding war for the 107-year-old company.
“This has a long way to run,” the source said. “It will take some time.”
A spokesperson for Glencore said the company does not comment on “market rumour or speculation”.
Anglo has caught the eye of its larger rivals because of its enviable position in mining for copper, which is in high demand as a vital building block in renewable energy projects and electric vehicles.
Glencore and Rio Tinto could prove to be a better fit for Anglo American than BHP, which made clear in its approach that the takeover would require Anglo to spin off some of its South African businesses, including the Kumba iron ore mine and Anglo’s platinum business, Amplats.
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The BHP approach received a frosty reception in South Africa, which is Anglo’s largest shareholder through its Public Investment Corporation and home to many of its mines.
Christopher LaFemina, an analyst at Jefferies, said last week: “Unlike BHP, Glencore could benefit from keeping Kumba and marketing iron ore, and Glencore may face less political pushback in South Africa, especially if it were to propose a straightforward all-share deal that does not include Kumba and Amplats demergers.”
Rio Tinto was approached for comment. Anglo American declined to comment.
