Anglo American has dug deep and come up with a convincing plan to preserve independence.
Word is that much of its strategy –divestment of De Beers and Anglo American Platinum – was in place as part of a strategic review before Mike Henry of BHP arrived on the scene with his twice-repelled deal.
The intention of Anglo chief executive Duncan Wanblad was to hold back until the South African elections scheduled for May 29.
With its long and deep heritage before and post-apartheid, Anglo was sensitive not to be drawn directly into a toxic political debate.
What is plain is that Anglo’s relatively swift and remarkably detailed and cogent response reflected the determination of chairman Stuart Chambers to dispel the idea that he has never received a takeover approach he doesn’t like.
No deal: Anglo American has turned down two takeover offers from rival BHP which is keen to get its hands on the UK mining giants copper assets
BHP will be discouraged by the ice cold response to what it regarded as a sensibly pitched second offer.
Henry recognises the potential dangers of becoming embroiled in a lengthy and complex takeover battle.
He has a disciplined approach to deal-making and knows that without Anglo’s board and big investors on side it could become messy.
BHP covets the copper assets which will be at the heart of a slimmed-down Anglo American. No one should rule out a return to the fray in six months.
This would be especially the case if Wanblad’s self-help plan should tumble down a mine shaft.
As with BHP’s offer, there are several moving parts to Anglo’s strategy.
The headline catcher is the proposed sale of De Beers, for so long the sparking core in the Oppenheimer family era.
The highest price might come from a Gulf wealth fund fascinated by a luxury asset, albeit one with mines attached. There is a real opportunity here for London Stock Exchange and investors to show their keen support for a City listing.
An initial public offering, putting a potential value on the diamond interests of as much as £4billion, would reassert the UK’s strength as a centre for natural resource companies.
Wanblad, his executives and advisers now face the challenge of execution.
There is a great deal of risk but perhaps less than for BHP. Divesting platinum to existing Anglo shareholders in South Africa will be possible without anti-trust and other regulatory flak.
There should be buyers for the coking coal steel operations. Glencore has been doubling down. It argues that better a known quoted firm is in charge of coal assets than an unknown entity.
Anglo has staked a great deal on Woodsmith, the vast British fertilizer project. It wants to remain engaged, will cut back on immediate capital investment, complete a feasibility exercise and then decide on next steps. Ideally, it would bring in partners to share development costs. There is a determination not to let go.
Too often when faced with a bid, UK-quoted companies fall at the first fence. Many find themselves exposed because of disinvestment by UK pension funds leaving assorted global investors, with little interest in heritage or the public interest, in control of the share register.
Anglo is showing resistance and its radical streamlining, an alternative to taking the money and running, is refreshing.
California dreaming
Full marks for the ambition of Jeremy Hunt who tells the FT that he would like to see Britain create a home-grown company valued at $1 trillion as part of his goal to create the next Silicon Valley.
Think again, Chancellor. At present the nearest thing we have is AstraZeneca, valued at $239billion (£191billion) and if Theresa May’s government had its way, it would now nestle on the other side of the Atlantic as Pfizer’s plaything.
Each time the UK has a tech company of promise, it ends up in overseas or private equity hands.
Cambridge brainpower is a particular target with Arm, Aveva and Darktrace among exits from London listings.
AI pioneer Deep Mind left for Google a long time ago and self-driving trailblazer Wayve now has Softbank as its biggest financier. Good luck with that if the Arm experience is a blueprint.