Elliott builds Anglo-American shares as miner threatens takeover

Chris Ratcliffe | Bloomberg | Getty Images

Elliott Management has built up a roughly $1 billion stake in the mining company Anglo-American in recent months, a person familiar with the matter told CNBC.

The activist's British arm, Elliott Advisors, confirmed in a filing with the regulator on Friday that it had a 2.5% stake in Anglo American. The position, which consists of cash-settled derivatives, is worth approximately £891 million, or approximately $1.1 billion. Anglo-American shares rose as much as 5% on Friday's news.

News of the activist's position comes as the $43 billion London-based miner faces a takeover stake from BHP, a mining giant with global operations. Anglo rejected BHP's $39 billion takeover bid on Friday morning, saying BHP's offer “significantly undervalues ​​Anglo American and its future prospects.”

Anglo-American declined to comment. The company is one of the largest copper producers in the world.

BHP's bid would have called for the spin-off of Anglo American's South African subsidiaries. The metal plays a crucial role in the global transition to clean energy and is used in the production of electric vehicles and wind turbines.

Anglo-American Chairman Stuart Chambers noted in the company's rejection that copper “represented 30% of Anglo-America's total production, and with the benefit of well-sequenced and value-increasing growth opportunities in copper and other structurally attractive products” , there was more value in the production of copper. will be created for shareholders in the coming months and years.

Elliott has extensive experience with mining companies, including at suitor BHP in 2017. The activist urged the company to spin off its petroleum business and abandon its primary listing in Australia in favor of a stock exchange listing in London.

BHP initially rejected those proposals before exiting the oil sector in 2021. The Australian miner is one of the largest in the world, with a market capitalization of $145 billion and mining revenue of $53.8 billion in 2023.

– CNBC's Karen Gilchrist contributed reporting.

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