Fears London stock market will lose another giant company after £31m takeover bid

April 25, 2024

4 minutes read

Fears the London stock market will lose another giant company soared yesterday — after a £31 billion mining takeover bid.

The approach for Anglo American was made by Australian rival BHP.

Anglo American is the 25th largest company in the FTSE 100Credit: Alamy

The mega deal — which would create the world’s biggest copper mining company — is driven by surging demand for the metal by green energy firms.

It is widely used in offshore wind farms and electric vehicles.

Anglo American is the 25th largest company in the FTSE 100.

A takeover would be a fresh blow to the London Stock Exchange and rock the UK’s status as the hub for mining and natural resources companies.

BHP quit the FTSE 100 for Australia in 2021. Swiss mining firm Glencore plans a New York listing for its spun-off coal business. And only weeks ago the boss of Shell threatened to leave London if valuations fail to improve.

Hargreaves Lansdown analyst Susannah Streeter said: “The buyout offer from BHP — the world’s largest publicly listed miner — for Anglo American won’t just shake up the mining industry, it’ll send a fresh chill through the City.

“There are concerns that if the deal goes through it could be the tip of the iceberg — and more giants could leave the exchange.”

Australia-listed BHP is using its own stock to offer £25.08 a share and said it will spin off Anglo’s South African assets to investors.

The move sparked opposition from South African politicians.

Shares in Anglo American soared by 355p, or 16.1 per cent, to £25.60, valuing the company at £34.2 billion — suggesting investors bet BHP will have to sweeten its offer considerably. Top shareholders have voiced concern that BHP is trying to wrangle a takeover on the cheap — even though Anglo’s shares have been drifting below its peers.

Anglo’s 11th biggest shareholder Legal & General said yesterday it had “concern” about the “highly opportunistic approach”.

L&G’s head of climate solutions Nick Stansbury said: “We believe the valuation of Anglo American to be depressed and regard the proposed exchange ratio as an unattractive proposition for long-term investors.”

Anglo and its army of advisers are reviewing the “unsolicited, non-binding and highly conditional” offer ahead of a May 22 bid deadline. Analysts said the takeover marks “crisis time” for the LSE because it suggests UK PLC is up for sale.

BOSS BAGS £13M DESPITE EXODUS

The boss of the London Stock Exchange Group was handed a £13 million pay packet — despite it facing a drought of new listings and an exodus of firms to New York.

Chief executive David Schwimmer will bag a £7 million rise as his pay doubles from £6.25 million.

Nearly 89 per cent of shareholders backed the bump at the LSEG’s meeting yesterday — despite calls to rebel against the “lump sum” increase.

Mr Schwimmer, left, has argued that UK bosses need to be paid more to compete with their US counterparts.

The LSEG makes 70 per cent of its revenues from data and analytics, rather than the stock market it is named after.

Sainsbury’s hope on inflation

Sainsbury’s boss Simon Roberts is hopeful that inflation will continue to fall and said the supermarket is winning shoppers from both discounters and upmarket rivalsCredit: Getty

Sainsbury’s boss Simon Roberts reckons food inflation will continue to fall — despite higher wages and poor crop harvests.

The chief executive also said the supermarket is winning shoppers from both discounters and upmarket rivals.

Sainsbury’s sold three times as many legs of lamb at Easter as in the previous year, as it cut prices. But Mr Roberts said a surge in sales of its Taste the Difference range suggested shoppers were no longer entirely driven by price.

The chain yesterday unveiled a 3.8 per cent rise in sales to £32 billion for the year to March 2, helped by a 9.4 per cent increase in its grocery sales.

It is targeting £1 billion of profits this year, after reporting headline profits of £966 million.

Sainsbury’s posted a 6.4 per cent slip in its annual clothing sales, which it blamed partly on disruptions to its Red Sea supply chain and partly on its “own misses” on ranges.

Bank slip number 2

Barclays has posted a 12 per cent slip in profits on the back of a weaker mortgage market and passing on more interest.

It revealed profits for the first quarter of £2.3 billion — a day after Lloyds nursed a 28 per cent drop in profits.

Barclays said UK operations income fell 7 per cent as higher interest rates hit demands for credit cards and loans. It also reported a 2 per cent drop in deposits due to rivals’ new account offers.

Sales take off

WH Smith has been boosted by holidaymakers buying more food and beauty products from its airport shops.

The retailer plans to open 110 more around the world this year as its efforts to sell a wider range of products pays off. Total sales grew by 9 per cent to £926 million. Chief executive Carl Cowling said WH Smith was in its “strongest ever position as a global travel retailer”.

Headline profits inched up to £46 million. Pre-tax profits fell 37 per cent, with store lease writedowns of £28 million.

Confidence of consumers continues to grow, according to the closely watched GfK Index. April’s overall score is still negative at -19 — but a big improvement on last year’s -30. Brits feel most positive about their finances at 2 points compared with last April’s -13.

Unilever shift

Unilever’s retreat from some of its environmental targets shows the business is now more focused on realism, its boss said yesterday.

The consumer goods firm has been attacked for its woke agenda such as trying to give a social purpose to its Hellmann’s mayonnaise. It has now pushed back the target for plastic reductions, and narrowed its social remit.

Boss Hein Schumacher said the firm is aiming for realism, adding: “We can all promise the earth but it is important to have achievable targets.”