Anglo American to sell 6.6% of Amplats ahead of spinoff

Anglo announced plans to exit its controlling stake in Johannesburg-listed Amplats in May as part of a wider restructuring plan.

Anglo American Plc is selling another chunk of its platinum business, in a move aimed at increasing the South African unit’s free float ahead of a full exit.

The British mining group is offering 17.5 million shares in Anglo American Platinum, increasing the size of the sale on the back of investor demand, according to terms seen by Bloomberg News. The shares are likely to price at R548 ($30.10) apiece, the terms show.

ADVERTISEMENT CONTINUE READING BELOW

The offering represents roughly a 6.6% stake in Amplats and would raise some $527 million for its parent, according to Bloomberg calculations. It follows a smaller selldown in September.

Anglo announced plans to exit its controlling stake in Johannesburg-listed Amplats in May as part of a wider restructuring plan that was unveiled in response to an unsolicited $49 billion takeover proposal by BHP Group. Anglo rebuffed the approach, partly because it deemed proposals to exit Amplats and Kumba Iron Ore before a takeover could proceed as too complicated.

Read: Anglo to sell the rest of coal business in R68bn deal

The move is the latest step in Anglo’s plan to radically restructure its business. On Monday, it announced it has agreed to sell its coal business in a deal that could be worth as much as $3.78 billion, while the company is also planning to exit nickel mining and sell or spin off its De Beers diamond unit.

Anglo said Tuesday that that it doesn’t intend to sell down its Amplats stake further before the planned split next year, with work ongoing for the platinum business to have a secondary listing in London.

Read: Anglo American to sell stake in Australian coal miner Jellinbah

ADVERTISEMENT: CONTINUE READING BELOW

The sale will cut the number of Amplats shares to be distributed among Anglo shareholders and thus reduce so-called flowback — referring to investors offloading shares obtained through a merger or spinoff, for example, because their mandates don’t allow them to hold the stock.

Read the Sens here.

© 2024 Bloomberg

Follow Moneyweb’s in-depth finance and business news on WhatsApp here.