Elliott Investment Management, led by Paul Singer, has acquired a substantial stake of approximately $1 billion in Anglo American Plc, a UK-listed mining company. The hedge fund has obtained exposure to nearly 33.6 million Anglo American shares through derivatives, marking a 2.5% holding amassed over recent months. This move positions Elliott among Anglo American’s top 10 shareholders, triggering a significant surge in the company’s stock value, which jumped as much as 6.3% in London following the disclosure of the stake.
The investment by Elliott comes amidst BHP Group Ltd.’s unsolicited takeover approach towards Anglo American. BHP, an Australian mining giant, has proposed an acquisition valued at £31.1 billion ($38.9 billion), aiming to create the world’s leading copper producer. Despite Anglo American’s acknowledgment of BHP’s proposal, it has stated that the offer significantly undervalues the company. Elliott’s involvement underscores the potential for shareholder activism in reshaping the strategic direction of Anglo American amid the takeover interest.
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Elliott’s reputation as an activist investor precedes its entry into Anglo American’s stock. The hedge fund is renowned for its strategy of investing in undervalued companies and advocating for measures such as share buybacks or business sales to enhance shareholder value. The presence of value-driven investors like Elliott in Anglo American’s shareholder register reflects the belief among some investors, such as Bluebell Capital Partners, that the company’s true value exceeds BHP’s offering.
Anglo American’s appeal as a takeover target lies in its valuable South American copper operations, contrasting with the industry’s general push to augment reserves and production. However, potential suitors have been deterred by the company’s complex structure, diverse commodity mix, and significant exposure to South Africa. Despite facing challenges, Anglo American has seen recent stock surges, particularly following BHP’s acquisition proposal.
Elliott’s involvement in mining extends beyond Anglo American, as evidenced by its past engagements with companies like BHP and Kinross Gold Corp. The hedge fund’s initiatives have led to significant corporate actions, including spin-offs and share buybacks. Additionally, Elliott’s role as a major shareholder in Triple Flag Precious Metals Corp. and its establishment of the Hyperion venture signify its broader interests in the mining sector, positioning the fund as a significant player shaping the industry landscape.
