Anglo American selling Amplats shares

Anglo American offered to sell about 13 million shares in Anglo American Platinum in a move aimed at increasing the South African firm’s free float ahead of a full exit.

London-listed Anglo said in a statement on Tuesday that the deal represents about 5% of Amplats’s total issued ordinary shares.

According to a term sheet seen by Bloomberg, the British mining group wants to raise around $400 million through the stake sale.

Goldman Sachs, Morgan Stanley and Rand Merchant Bank are handling the transaction. Investor demand covered the offer in full shortly after the launch, according to a bookrunner message seen by Bloomberg.

Anglo announced plans to exit its controlling stake in Johannesburg-listed Amplats in May as part of a wider restructuring plan that was unveiled in response to an unsolicited $49 billion takeover proposal by BHP Group.

Anglo rebuffed the approach, partly because it deemed proposals to exit Amplats and Kumba Iron Ore Ltd. before a takeover could proceed as too complicated.

Anglo Chief Executive Officer Duncan Wanblad is now under pressure to show that his plan for the company is a better alternative for investors.

“Breaking it up piece by piece isn’t such a bad idea,” said Panmure Liberum analyst Ben Davis. “Unless someone wanted the whole Anglo American holding.”

Tuesday’s sale will cut the number of Amplats shares to be distributed among Anglo shareholders and thus reduce so-called flowback — referring to investors offloading shares obtained through a merger or spinoff, for example, because their mandates don’t allow them to hold a stock.

Amplat’s Chief Executive Officer Craig Miller said in July the South African company was considering a secondary listing in London as a way to broaden its investor base following the demerger from Anglo, which is expected to complete in 2025.