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Anglo American (Baa2/BBB): Rejects BHP

BASIC INDUSTRIES

• As we noted yesterday, the implied premium of 13% was modest. Unsurprisingly, Anglo view this as undervaluing the company describing the approach as “opportunistic”.

• They also state that the structure is unattractive.

• Reading between the lines, if anything Anglo would want a higher price and a cash component to come to the table.

• Expect AALLN spreads to give back some but not all of yesterday's gains.

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