Anglo American faces break-up bid

LONDON: Anglo American, the world’s third-largest miner, could face a potential $80-bn break-up bid from rivals, The Observer reported on Sunday. Brazil’s CVRD, Swiss-based Xstrata and Rio Tinto are looking at a possible break-up bid and have hired financial advisers ahead of a potential approach, the newspaper said, citing unidentified sources in London.

The mining sector has been undergoing a period of consolidation as miners scramble to secure supplies of commodities such as iron ore, coal and nickel.

Inco’s board had said earlier this week that it may begin talks with CVRD following a $17.8bn offer from the latter, and has also received bids from Phelps Dodge and Canadian zinc miner Teck Cominco.

However, Swiss-based Xstrata said on Monday that it was not looking at taking part in the possible bid, a source familiar with the situation said. “Xstrata have just bought Falconbridge and are focused on integrating that so they would not be thinking of biting something off as big as that (Anglo),” the source said.

Shares in Anglo American closed at 2,369 pence on Friday, valuing the group at around £36bn ($68bn), but the paper said the premium could take the full cost to $80bn.