MARKET analysts believe European Commission approval is imminent for Johannesburg Consolidated Investments’ purchase of Anglo American’s 26,8% stake in multinational Lonrho, after JCI chairman Mzi Khumalo met EC representatives last week to discuss the takeover.
Meanwhile, on Friday Khumalo announced JCI’s disposal of its 8,7% stake in British company Johnson Mathey to SBC Warburg for 105-million, which will be used to finance part of the R2,5-billion required to pay for the 26,8% Lonrho stake held by Anglo, De Beers and Southern Life.
JCI’s purchase of Anglo’s Lonrho stake required EC approval beacause Anglo was last year ordered by the EC to reduce its stake in Lonrho to below 10% in the interests of fair competition. Observers believe the EC might have raised the issue of cross-directorships between Anglo and JCI with Khumalo. It is expected he will be asked to resign from Anglo’s board and to reshuffle JCI’s board to reduce Anglo’s influence. Anglo currently has three directors on JCI’s board.
It is believed Khumalo is desperate to see the purchase of Anglo’s Lonrho stake through, after an earlier attempt at a merger between JCI and Lonrho failed. The sale of Johnson Mathey is seen as the start of JCI’s disposal of core assets to raise finance for the Lonrho stake. It is believed that next in line will be JCI’s 9,8% stake in Amplats and its coal division Tavistock, the sale of which is being negotiated with Lonrho’s local coal division Duiker. This would be a good strategic move as JCI would retain indeirect ownership of Tavistock once it became the single largest Lonrho shareholder.