Elliott Management's $1B Anglo American Stake Ups Ante As Mining Megamerger Collapses

Activist investor Elliott Management has quietly built a $1 billion stake in Anglo American NGLOY, adding pressure to the UK-listed mining giant after it became the target of a $39 billion takeover bid from BHP Group BHP. This development emerged after Anglo American's board rejected BHP’s offer, deeming it “highly unattractive” due to its undervaluation of the company’s prospects and its complex structure.

According to Bloomberg, Elliott Management, led by billionaire Paul Singer, has amassed this holding over the last months. Persons with knowledge of the matter requested anonymity due to the confidential nature of the information. The UK takeover rules require shareholders involved in potential deals to disclose their holdings if they hold more than 1% in either the target or bidding firm.

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Elliott has a history of taking sizable positions and advocating for strategic changes. In 2017, they started pressuring BHP to divest its oil assets and prioritize shareholder returns, resulting in a merger of their petroleum business with Woodside Energy Group. With this size of the stake, the firm would be among the top 10 shareholders of Anglo American, which has seen its stock surge as high as 6.7% on Friday.

This situation isn’t Elliott’s first venture into the mining sector. In 2022, the activist hedge fund was involved with Kinross Gold KGC, prompting it to ramp up its share repurchase program significantly. It also holds a 66.6% stake in Triple Flag Precious Metals TFPM, a financial solutions provider in the sector.

The current involvement comes as copper prices hit $10,000 per ton, marking the first time in two years that the metal has reached this level. This spike is fueled by investor anticipation of a significant deficit in copper supplies due to increasing demand driven by green energy initiatives.

BHP’s proposed takeover, coupled with the rising price of copper, strengthens Anglo American’s bargaining position. Whether Elliott Management intends to push for similar strategic changes within Anglo-American or simply capitalize on the future value of copper remains to be determined.

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