Elliott Investment Management has built up a stake of about $1 billion in Anglo American Plc, the British-listed miner that has received an unsolicited takeover approach from Australia’s BHP Group Ltd.
The activist hedge fund led by Paul Singer has exposure to nearly 33.6 million Anglo-American stocks through derivatives, according to a U.K. regulatory filing Friday that report by Bloomberg News. The company has amassed the 2.5% stake in recent months, according to people familiar with the matter who asked not to be identified discussing confidential information.
The investment puts Elliott among Anglo American’s ten largest shareholders, according to data compiled by Bloomberg. Anglo-American shares rose as much as 6.3% in London after Bloomberg News reported the stake.
Elliott also has a 0.07% short position in BHP, a separate filing showed. Representatives for Elliott and Anglo American declined to comment.
Elliott’s presence in Anglo American shares comes to the fore as the mining company is the subject of a takeover stake from BHP. The Australian miner did that suggested a takeover that values its smaller rival at £31.1 billion ($38.9 billion) and would create the world’s largest copper producer. Bloomberg News reported BHP’s approach on Wednesday. Anglo-American said the proposal significantly undervalued Company.
Singer’s company is known for intervening in troubled stocks and then pushing companies to take actions ranging from share buybacks to selling the company outright.
“We like to see value-driven investors on the register,” said Giuseppe Bivona, chief investment officer at another activist, Bluebell Capital Partners, which built a stake in Anglo American in February. The company “is certainly worth a lot more than BHP is offering.”
Anglo American has long been seen as a potential target among the biggest miners, especially because it owns attractive South American copper assets at a time when most of the industry is eager to add reserves and production.
But candidates have been put off by the complex structure and mix of other commodities, as well as the high exposure to South Africa. Anglo-American in February reported a sharp decline in profits and cut the dividend due to declining demand for diamonds and platinum group metals – raw materials unique to the portfolio.
BHP has proposed an all-share deal under which Anglo would first hand over controlling interests in South African platinum and iron ore companies to its shareholders.
Shares in Anglo American closed 3.2% higher at 2,643.00 pence in London on Friday, giving it a market value of around £32.4 billion. The stock rose 16% on Thursday after BHP’s approach. Even after this week’s rally, the stock is still down more than a third from its peak two years ago.
Elliott took a significant position in BHP 2017 and pushed it to spinoff certain oil assets. In 2021, the miner struck offers that has expanded its withdrawal from fossil fuels, including: sale of oil and gas activities Woodside Petroleum Ltd.
Singer’s firm has also been involved in other metals companies. In 2022, Elliott held discussions with Kinross Gold Corp., which resulted in the miner making a Share buyback worth $300 million. And it is the majority owner of Triple Flag Precious Metals Corp., which provides financing to mining companies. It is also setting up a new venture, Hyperion, to invest in mining assets.
