Indian billionaire Anil Agarwal is trying to buy a stake of as much as 2 billion pounds ($2.4 billion in Anglo American (LON:AAL), representing about 12% of the firm, one of the main rivals to the tycoon’s Vedanta Resources (LON:VED).
The deal would make of Volcan Investments Ltd., Agarwal’s family trust, the second-largest investor in Anglo American behind Public Investment Corp., South Africa’s state-run pension fund.
It could also give Vedanta’s founder and chairman a commanding voice at Anglo American, the world’s fifth-largest miner by market value, which Agarwal described in a statement as “a great company with excellent assets and a strong board and management team who are executing a focused strategy.”
While he noted he didn’t intend to take control of the diversified miner, this is not his first attempt to grab a stake in Anglo. Last year, he approached the London-listed company with an offer to merge with Hindustan Zinc, a mining firm he controls through Vedanta, India’s largest miner. But Anglo stopped the approach in its tracks saying a deal didn’t make sense and wasn’t feasible.
The investment is a major vote of confidence in Anglo American, which has staged an impressive turnaround since commodity prices began climbing last year. Last month, the firm logged a profit of $1.6 billion for 2016, its first annual revenue in five years.
The company’s shares soared on the news and they were trading 8.7% higher to 1,298 pence at 12:55 p.m GMT. The stock almost quadrupled last year, recovering after five years of losses.