Activist Elliott Builds $1 Billion Anglo American Stake

(Bloomberg) — Elliott Investment Management has built a roughly $1 billion stake in Anglo American Plc, the UK-listed miner that’s received an unsolicited takeover approach from Australia’s BHP Group Ltd.

Most Read from Bloomberg

The activist hedge fund led by Paul Singer has exposure to almost 33.6 million Anglo American shares via derivatives, according to a UK regulatory filing Friday that confirmed a report by Bloomberg News. The firm amassed the 2.5% holding over recent months, according to people familiar with the matter, who asked not to be identified discussing confidential information.

The investment puts Elliott among Anglo American’s 10 biggest shareholders, data compiled by Bloomberg show. Anglo American shares jumped as much as 6.3% in London after Bloomberg News reported the stake.

Elliott also has a 0.07% short position in BHP, a separate filing shows. Representatives for Elliott and Anglo American declined to comment.

Elliott’s presence in Anglo American’s stock emerges with the mining company the subject of takeover interest from BHP. The Australian miner has proposed an acquisition that values its smaller rival at £31.1 billion ($38.9 billion) and would create the world’s top copper producer. Bloomberg News reported BHP’s approach on Wednesday. Anglo American said the proposal significantly undervalues the company.

Singer’s firm is known for stepping in to beaten-down stocks and then pushing companies to take measures ranging from share buybacks to outright sales of the business.

“We like to see value-driven investors in the register,” said Giuseppe Bivona, chief investment officer at another activist, Bluebell Capital Partners, which built a stake in Anglo American in February. The company “is surely worth much more than BHP is offering.”

Anglo American has long been viewed as a potential target among the largest miners, particularly because it owns attractive South American copper operations at a time when most of the industry is eager to add reserves and production.

But suitors have been put off by its complicated structure and mix of other commodities, as well as its deep exposure to South Africa. In February, Anglo American reported a steep drop in profit and lowered its dividend on the back of falling demand for diamonds and platinum group metals — commodities that are unique to its portfolio.

BHP has proposed an all-share deal in which Anglo would first spin off controlling stakes in South African platinum and iron ore companies to its shareholders.

Read More: Anglo’s Stumbles Make It Prey for Mining’s Biggest Predator

Shares in Anglo American closed 3.2% higher in London on Friday at 2,643.00 pence, giving it a market value of about £32.4 billion. The stock surged 16% Thursday after BHP’s approach. Even after this week’s rally, the stock is still down more than a third from its peak two years ago.

Elliott took a sizable position in BHP in 2017 and pushed it to spin off certain oil assets. In 2021, the miner struck deals that extended its withdrawal from fossil fuels, including a sale of oil and gas operations to Woodside Petroleum Ltd.

Singer’s firm has been involved with other metals companies as well. In 2022 Elliott held talks with Kinross Gold Corp. that resulted in the miner announcing a $300 million share buyback. And it’s the majority shareholder in Triple Flag Precious Metals Corp., which provides financing for mining companies. It’s also setting up a new venture, Hyperion, to invest in mining assets.

–With assistance from Thomas Biesheuvel, Fareed Sahloul and Nishant Kumar.

(Updates Anglo’s closing price in 11th paragraph.)

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.

Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

Comments are closed.

If you would like to receive our free newsletter via email, simply enter your email address below & click subscribe.

MOST ACTIVE MINING STOCKS

 Daily Gainers

 Romios Gold Resources Inc. RG.V +50.00%
 Rokmaster Resources Corp. RKR.V +50.00%
 Augur Resources Limited AUK.AX +33.33%
 Stroud Resources Ltd. SDR.V +31.25%
 Casa Minerals Inc. CASA.V +30.00%
 RJK Explorations Ltd. RJX-A.V +28.57%
 Middle Island Resources Ltd. MDI.AX +23.53%
 Tearlach Resources Ltd. TEA.V +20.00%
 CMC Metals Ltd. CMB.V +20.00%
 Rimfire Pacific Mining NL RIM.AX +17.24%