Duncan Wanblad is on the clock. Earlier this week, the Anglo American boss unveiled a R19bn deal to sell its one-third stake in Australian coal miner Jellinbah to joint shareholder Zashvin.
The deal is the latest small, but crucial, step by Wanblad to prove that his self-help measures to boost shareholder returns are more than just corporate lip service amid rumours — per the Financial Times — that BHP is weighing up how it might make a renewed bid for Anglo.
Let’s recap this spectacle of strategic posturing: In May the Big Australian ended a five-week pursuit of Anglo when its R700bn-plus buyout offer hit a roadblock as the deal required the sale of Anglo’s SA assets. That would have included the sale of Kumba Iron Ore and Anglo American Platinum (Amplats), both major employers.
In reaction Anglo, whose fortunes and history are intertwined with those of SA, snubbed the offer as highly complex and unattractive. Instead, it countered with a proposal to spin off its platinum assets, sell De Beers and offload its steelmaking coal business.
The proposals weren’t much different to BHP’s other than the Anglo plan eschewed the immediate sweetener of a premium in favour of a long game.
In the end shareholders, which include the Public Investment Corporation (PIC), were swayed by the promise of Anglo’s vision that two, three or four birds in the bush are better than one in the hand.
Almost six months after the UK takeover regulators sidelined BHP from making any further moves to buy Anglo, Wanblad had a tight deadline to demonstrate to shareholders that his story of self-reliance and strategic patience would have a happy ending.
Alongside the sale of a 33.3% stake in the Australian coal miner Jellinbah for A$1.6bn, Wanblad took the first step in hiving off Amplats in September. Anglo sold a 5% stake through a share sale — a so-called accelerated book build — raising R7.2bn and boosting the number of shares that can be freely traded as it prepares to float Amplats on the London Stock Exchange.
Should BHP return with a new offer, has Wanblad done enough to keep shareholders — about 26% of whom are based in SA — on his side? This is far from being a trivial question. The stakes are high and the answer could determine the future of Anglo.
Fuelling the speculation that BHP could return for another go is a report from the Financial Times a few weeks ago that BHP CEO Mike Henry and his M&A maestro, Catherine Raw, have been making the rounds in SA, meeting government officials and the PIC — Anglo’s biggest shareholder.
The reason? BHP’s initial offer sparked a political uproar. The government was blindsided just a few weeks before an election by the bid for a company that is deeply woven into the national economy.
Gwede Mantashe, mining minister at the time, didn’t mince his words, sharply criticising the plan to buy Anglo and spin off its SA assets. Henry, whose preference had been to pitch the initial bid to the government and major shareholders in private, can ill-afford any further missteps. He must proceed with finesse.
The whispers of a renewed bid for Anglo are growing louder, and it’s clear BHP won’t let this one go without a fight. So, what’s the game plan?
The clock is ticking, and the world is watching. Will Wanblad rise to the occasion and prove that his self-help measures are more than just corporate jargon? Or will he crumble under pressure, leaving Anglo vulnerable to a takeover?
One thing is certain, though: the heat is on, and Wanblad had better be ready to deliver.
• Motsoeneng is Business Day deputy editor.
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