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20 Jul 2009 08:16
The incoming chairperson of mining group Anglo American, John Parker, believes a “merger of equals” proposal from rival Xstrata is distracting management, he said in an interview on the company’s website.
“The board have obviously evaluated this proposition very carefully, as you would expect from a board of this standing, but there’s a clear value gap. And frankly, as far as I’m concerned, this is a great distraction for management,” he said.
“I want to see them focused on wringing out the value that’s inherent in this business and I’m very confident that they have plans to do so.”
Anglo-Swiss Xstrata said on June 21 that it wanted to launch talks with Anglo about a “nil premium” merger, but Anglo rejected it the following day a “totally unacceptable”.
Anglo has so far not utilised UK takeover regulations to request a “put up or shut up” ruling, which requires Xstrata to launch a formal takeover offer or walk away for six months.
Parker also offered support for chief executive Cynthia Carroll, who has been criticised by some analysts and in media reports.
“I’m very happy with the plans that Cynthia Carroll as chief executive has outlined to me for cost reductions and value creation.
And I’m also very supportive of her leadership, and the management team, in delivering that value to shareholders.”
Xstrata has said a merger can deliver $1-billion in cost synergies, but Anglo has pointed to its own plans to reduce costs by $2-billion by 2011.
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