ANGLO American was drawing up plans to defend a possible takeover attempt by tycoon Anil Agarwal’s Volcan Investments, said the Sunday Telegraph citing sources saying the UK group was mindful that the time for a bid was drawing close.
In 2020, Volcan Investments either has to buy the underlying shares held in previously acquired voting rights the company owns in Anglo or roll over the loan entitling it to the voting shares. “He doesn’t have the money right now,” a City source told the Sunday Telegraph in its April 21 edition. “He will look to find a partner such as a sovereign wealth fund or agree as part of any deal to sell some assets,” the source said.
“If he wants to bid, he needs to do it by the end of the year,” the source added. Neither Anglo, nor Volcan Investments – which is Agarwal’ family trust – commented when approached by the newspaper, it said.
Anglo had called in three banks – Morgan Stanley, Goldman Sachs, and Centerview – to help defend against the hostile offer. Their argument will be that Vedanta has an inferior suite of assets compared to Anglo whilst the Indian firm’s track-record for environmental compliance is questionable. Volcan Investments controls Vedanta which recently delisted from the London Stock Exchange.
“Anglo is at the ready,” another City source told the newspaper. “Their defence advisers are armed with files,” it added.
Agarwal has said previously that he is not planning a takeover of Anglo, but he had previously suggested that his company merge base metal assets with Anglo, or that the two companies could co-operate to work on businesses in India. Agarwal has also professed an admiration of Anglo, especially its long history of business in Africa.