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Xstrata likely to abandon pursuit of Anglo

Xstrata “’ expected
to abandon pursuit
of Anglo American
 
London, England — MININGREVIEW.COM — 13 October 2009 – Mining group Xstrata “’ the world’s fifth biggest diversified mining group by market value “’ has told a top-10 shareholder that it was likely to abandon its pursuit of rival mining giant Anglo American.

“They have pretty much indicated to us that they will be walking away,” the investor, who declined to be named, told Reuters here.

“Xstrata believes that with the new Anglo chairman coming in, they don’t have enough support really to press, and they feel there is no point in making it hostile,” the investor added.

British regulators issued a ruling on 2 October requiring Xstrata to make a formal takeover offer by 20 October or undertake not to return before April.

“Xstrata are just going to wait for six months and see if things deteriorate from an Anglo perspective, or if Anglo chairman John Parker changes his view. We think this is unlikely,” the investor said.

A combination of Xstrata and Anglo American would create the world’s biggest producer of zinc, platinum, coal for power stations and ferrochrome, and the second-biggest company in coal for steelmaking and in copper.

Another top-10 investor also said Xstrata would not press ahead.

“We believe Xstrata will walk away. They have made it pretty clear that the terms for Anglo are what they are, and they are not willing to sweeten them.”

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