All eyes on Anglo update ahead of Xstrata report
MINING giant Xstrata is braced to post disappointing results at its interims tomorrow, but the focus will be on its nil-premium merger with rival Anglo American.
Xstrata made the approach for a “merger of equals” back in June, but was met with hostility by Anglo, which last week reported a 69 per cent drop in underlying profits to $1bn (£598m) for the first six months of the year.
Anglo said at the time that the terms of the deal were “totally unacceptable”.
Xstrata is limited in its ability to speak out on the proposed deal by Takeover Panel rules, but is expected to highlight its core strengths, to entice Anglo’s shareholders.
“We expect the company to do all it can to allow investors to draw their own conclusions over what Xstrata may be able to bring to a merged entity,” ING’s Nick Hatch said at the weekend.
Anglo, under the directorship of Cynthia Carroll, has been under fire for its management structure. Industry sources say Xstrata’s Mick Davis’ management style would be welcomed at Anglo.
As the company recently put out a detailed production report, numbers in tomorrow’s results are not expected to shock.