Those betting on an Anglo American break-up may soon be disappointed.
Speculators have been buying Anglo ahead of a seminar on its De Beers business scheduled for Monday, with some reckoning the diamond division may be spun off as part of new chief executive Mark Cutifani’s strategic review due in December.
Anglo’s ownership of De Beers is seen as a poison pill for Glencore, whose chief executive Ivan Glasenberg stressed last month it does not trade diamonds.
Barclays put a value on De Beers at $13.4bn, up from an implied value of $12.8bn when Anglo bought full control of the business in 2011. That suggests a spin-off could be value accretive, particularly given Anglo is trading at a 37 per cent discount to its sum of the parts value, the broker said.
However, analysts still see such a move as unlikely. “With commodity prices suffering elsewhere, Anglo needs all the earnings and cash flow it can get,” said Barclays, while house broker Morgan Stanley reckoned De Beers is “not obviously undervalued” within Anglo. The shares slid 2.4 per cent to £13.21 in a weak mining sector.