Glencore May Bid for Anglo American in 2015, Jefferies Says
2014-09-03 05:55:28.136 GMT
By Tim Barwell
Sept. 3 (Bloomberg) -- There’s an increasing possibility of
Glencore buying Anglo next year in all-share offer, Jefferies
says in note.
* Jefferies (buy): Same benefits from Xstrata purchase (asset
quality, increased control of commodity supply, boost for
trading unit, synergies) would result from such a deal
* Would create at least $1.5b of operational, revenue
synergies per yr
* Anglo CEO Cutifani comments yday highlight co. would be
open to offer at right price
* An offer of 5.3 Glencore shares for each Anglo share
would be about 12% EPS accretive for Glencore by year 3;
would imply 25% premium to Anglo’s current share price
* If Glencore shares outperform over the next 6-12 months,
as Jefferies expects, the required ratio to get to a 25%
premium would decline; deal could get done closer to 5.0
* Antitrust risk could be an issue in platinum, copper and
South African coal; Jefferies thinks these could be
overcome
* Doesn’t see any other likely bidders, says Rio Tinto
can’t be fully ruled out
* NOTE (yday): Anglo American CEO Says Open to Takeover
Offers: WSJ; Shares Up
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To contact the reporter on this story:
Tim Barwell in London at +44-20-7073-3512 or
tbarwell@bloomberg.net
To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
2014-09-03 05:55:28.136 GMT
By Tim Barwell
Sept. 3 (Bloomberg) -- There’s an increasing possibility of
Glencore buying Anglo next year in all-share offer, Jefferies
says in note.
* Jefferies (buy): Same benefits from Xstrata purchase (asset
quality, increased control of commodity supply, boost for
trading unit, synergies) would result from such a deal
* Would create at least $1.5b of operational, revenue
synergies per yr
* Anglo CEO Cutifani comments yday highlight co. would be
open to offer at right price
* An offer of 5.3 Glencore shares for each Anglo share
would be about 12% EPS accretive for Glencore by year 3;
would imply 25% premium to Anglo’s current share price
* If Glencore shares outperform over the next 6-12 months,
as Jefferies expects, the required ratio to get to a 25%
premium would decline; deal could get done closer to 5.0
* Antitrust risk could be an issue in platinum, copper and
South African coal; Jefferies thinks these could be
overcome
* Doesn’t see any other likely bidders, says Rio Tinto
can’t be fully ruled out
* NOTE (yday): Anglo American CEO Says Open to Takeover
Offers: WSJ; Shares Up
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Tim Barwell in London at +44-20-7073-3512 or
tbarwell@bloomberg.net
To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net