Published : 5 months ago, on 16/05/2024

Exclusive-Anglo American starts revamp with hiring freeze, document shows

By Scott Murdoch and Melanie Burton

SYDNEY (Reuters) -Anglo American has suspended hiring globally according to an internal memo reviewed by Reuters, as it gets plans underway to simplify itself and build value – and avert a $43 billion takeover bid by Australia’s BHP Group.

Anglo laid out plans on Tuesday to refocus its company on energy transition metal copper while spinning out or selling its less profitable coal, nickel, diamond and platinum businesses, as it moves to fend off the world’s biggest miner.

The London-listed miner has rejected BHP twice, saying its proposals continue to significantly undervalue the company.

“Following yesterday’s announcement of our plans to unlock significant value through a simplification of our portfolio … it is appropriate that we put in place a freeze on the recruitment of all non site-based permanent employees and contractors across all Businesses and Group Functions,” People and Organisation Director Monique Carter said in the memo.

“In instances where formal written offers have been made to a candidate, we will honour those commitments however no new offers should be made,” Carter said, adding the freeze also applied to consultants beyond those already contracted.

BHP’s options to take over Anglo are narrowing as it approaches a May 22 deadline to lodge a binding offer.

“There is certainly pressure on Anglo’s management to prove themselves,” said analyst Kaan Peker at RBC, adding that management will want to be keeping a strict lid on costs as the process unfolds.

Anglo’s plan to spin out its Australian metallurgical coal business could ultimately attract Rio Tinto, which exited its coal business in 2018, to the pared-back company.

“Management buys themselves six to nine months or a year, then arguably you might have three interested parties at the table,” Peker said.

Anglo did not immediately respond to an emailed request for comment.

Australia’s mining and energy union said on Wednesday it would seek urgent meetings with Anglo to discuss workers’ job security.

Anglo shares closed up 0.2% at 26.48 pounds on Wednesday, below BHP’s latest offer of about 27.53 pounds per share.

(Reporting by Scott Murdoch and Melanie Burton; Editing by Christian Schmollinger and Christopher Cushing)