By Edward West South Africa Business Report www.busrep.co.za February 02 2001 Cape Town - De Beers' share price rocketed 17,37 percent, or R44,40, to close at a new 12-month high of R300 yesterday on the surprise news that Anglo American had made a takeover bid for the diamond group. The proposed deal could unlock potential in De Beers and dismantle a complicated series of cross-holdings with Anglo American, the mining and resources group. It could also lead to a proposal being put to the holders of De Beers' linked units at $40 per linked unit, De Beers said in a cautionary statement. The offer represented a slight premium (about R8 a share) to yesterday's share price, based on the currency at R7,72 a dollar. The announcement of the proposed $11 billion deal propelled the all share index on the JSE Securities Exchange to a record year high, gaining 1,7 percent, or 155,7 points, to end at 9227,5. The index is now less than 100 points away from an all-time high. Anglo American said it had made a fair offer in its bid for De Beers. The $11 billion deal would benefit shareholders of both groups, an analyst said yesterday. Anglo American shares were up 1,33 percent, or 640c, to R488,40. The proposed deal between De Beers and the founding Oppenheimer family, Anglo American and Debswana - De Beers' joint venture with the Botswana government - led to about a million of De Beers' 400 million shares being traded on the JSE yesterday. "We had been expecting this news over the past 12 to 18 months, but we were still taken by surprise at how fast it has all happened," said one analyst. Tony Trahar, the chairman of Anglo American, "has certainly surprised us over the 10 months he has been in office". The consortium with which De Beers is in talks is 45 percent represented by the Oppenheimer family holding company Central Holdings Limited, 45 percent by Anglo American and the remaining 10 percent by Debswana. Anglo American already holds a 32,3 percent stake in De Beers, while De Beers holds 35,4 percent of Anglo. The offer, likely to comprise a combination of Anglo shares and cash for De Beers minorities equivalent to $40 a share, was expected to result in the effective delisting of De Beers, the analysts said. Central Holdings Limited would pitch for the remaining 68 percent of De Beers, in the ratio of the shareholders' stakes in the Central Holdings Limited, with Debswana likely to resell its shares back to Anglo later. "The elimination of this cross-holding will not only be to the benefit of Anglo's rating, but also to De Beers' shareholders. Anglo has always said it liked De Beers' mining operations; it fits in with Anglo's focus on mining and resources," one of the analysts said. Anglo had been divesting itself of its non-core assets - yesterday's conclusion of the conditions precedent for a share swap with Remgro for Anglo's 15,3 percent of FirstRand was a case in point - but the deal would tidy Anglo's shareholding structure and improve its share rating, analysts said. -END- ------------------------ Yahoo! Groups Sponsor ---------------------~-~> <FONT COLOR="#000099">eGroups is now Yahoo! Groups Click here for more details </FONT><A HREF="http://click.egroups.com/1/11231/0/_/126/_/981081715/"><B>Click Here!</B></A> ---------------------------------------------------------------------_->
