April 26, 2024 09:13 GMT
Anglo American (Baa2/BBB): Price Impact
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• Equity marginally lower and spreads unchanged to 1 wider following Anglo’s rejection of BHP’s proposed bid.
• The market seems to share our view that Anglo is looking for a higher price and/or a cash component.
• Nonetheless we are a little surprised spreads have fully held their gains. A debt funded cash component would weigh on the combined group’s credit metrics. There is also the risk that BHP will not improve, or Anglo truly doesn’t want to engage. On the positive side, asset sales are another possibility to raise cash.
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