Anglo American (AAUK) Calls Xstrata Takeover Proposal "Unattractive" and the Terms "Totally Unacceptable"
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Anglo American plc (Nasdaq: AAUK) confirmed it has rejected a takeover proposal from Xstrata, calling the combination "unattractive" and calling the terms of the proposal "totally unacceptable."
In a statement, Anglo American plc board said, "The Board of Anglo American has regularly reviewed its strategic alternatives, including the rationale for a combination with Xstrata, as a way of progressing Anglo American's objectives. In view of Xstrata's formal request that Anglo American should now consider a merger, the Board has updated its views on the merits of a potential combination.
The Board has concluded that a combination with Xstrata would profoundly impact the nature of the Group's portfolio by significantly diluting Anglo American's unique exposure to the structurally attractive platinum, iron ore and diamond markets while increasing exposure to nickel and zinc.
In reaching its view the Board has also had particular regard to the comparative quality and life of the producing assets and the growth to be delivered from the respective project portfolios of the two companies.
The Board also believes that the integrated approach to asset optimisation and procurement that the Group has implemented will deliver substantial further cost savings for the benefit of Anglo American shareholders.
The Board has therefore concluded that the strategic case for the combination is unattractive for Anglo American shareholders. Irrespective of this lack of strategic merit, the terms proposed by Xstrata were totally unacceptable.
In the light of the review the Board of Anglo American has unanimously concluded that the proposed combination with Xstrata would not be in the interest of Anglo American shareholders."
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