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If Xstrata is to shut up on Anglo it should say so
Only a week to go before decision time and it looks increasingly as though Xstrata boss Mick Davis has already made up his mind and opted to walk away from making a formal bid for mining rival Anglo American.
Reuters correspondent Raji Menon quotes an unnamed top-10 shareholder in Xstrata saying: “They have pretty much indicated to us that they will be walking away”.
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This makes sense –Â nothing has changed since Xstrata got a “put up or shut up” notice from the UK’s Takeover Panel, giving it until October 20 to make a formal offer or walk away for six months.
If Xstrata has indeed made up its mind, it should waste no time in telling investors that it has no plans to make an offer. Why wait?
Takeover Panel sets Cadbury clock ticking for Kraft
So Cadbury has succeeded in convincing the UK’s Takeover Panel — the City of London body which polices M&A — to slap a “put up or shut up” order on Kraft.
Kraft now has until Nov. 9 to decide whether to make a formal offer for the British confectionery group. If it decides to walk away, it is not allowed back for six months.
Stitz-up at Merrill Lynch?
Was it a gaffe or was the poor man misquoted? We certainly have two very different accounts of Todd Stitzer’s contribution to a closed conference at Merrill Lynch on 22 September. Maybe it would be better if these sort of briefings just didn’t take place.
According to a Merrill specialist salesman, who jotted down his remarks, Cadbury’s chief executive devoted his entire performance to sharing some thoughts about Kraft’s bid proposal. This was a pretty sensitive subject to pick but, hey, these were serious investors. So he allegedly indicated the possible exit price and the scale of the possible synergies from the deal. The salesman noted that:
Cadbury’s Kraft sugar rush overdone
Kraft’s offer for Cadbury got off to a sticky start on Tuesday when the U.S. food group’s stock fell 6 percent, taking some of the buzz out of Cadbury’s bid-fuelled share price.
Kraft’s initial offer has raised expectations of a higher bid, but while it is likely to have to pay more to win, the take-out prices now being touted are stretching the value of the British confectionery group further than a Curly Wurly.
Anglo dresses interims up as a defence
   Anglo American hasn’t yet received a formal bid from Xstrata. But the miner’s interim results read very much like a defence document.
   The highlights alone give a pretty good idea of what chief executive Cynthia Carroll and new chairman John Parker will focus on if Xstrata does eventually pounce.
   Anglo’s case hinges on four things.
   First, that its plan to cut $2 billion of costs by 2011 is ahead of target. Second, that it is getting on top of its $11 billion net debt, and third, that progress is being made in restructuring its problem child Anglo Platinum <AMSJ.J>. Lastly, Anglo acknowledges that it is an objective to reinstate the dividend.
   Added to these elements, lest they appeared to have too defensive a flavour, is the promise of growth, largely through its Minas-Rio iron ore project in Brazil and its Los Bronces copper development.
   Of these, cost savings are a crucial point of contention in the Xstrata debate, with the rival miner’s chief executive Mick Davis confident he can squeeze a further $1 billion out of a combination with Anglo, taking the total to $3 billion.
   Anglo isn’t making any promises beyond those already given but the tone of the language — which includes talk of being ahead on “asset optimisation”, procurement and job reductions — hints that it may be able to find more savings on its own, without handing anything to Xstrata.
   So far the market seems largely happy to let Carroll stick to her plan — highlighting Anglo’s leading position in platinum, diamonds and iron ore alongside its cost cutting success. But investors might ask more searching questions in the event that Xstrata did come back offering a premium.
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The Wall
