Anil Agrawal, metal trader turning mining merchant, dared to make a surprising $2.44 billion share purchases in Anglo American - owner of the largest diamond producer De Beers, and one of the world's top five miners. Agarwal's move came after the company rebuffed a merger proposal made by Vedanta Resources- of which Agarwal is the controlling shareholder.
Vedanta's family trust Volcan Investments will own over 13 per cent stake in Anglo American, and emerge as its second largest shareholder, right after South Africa's Public Investment Corporation, which has a 15 per cent holding. Volcan and Vedanta said the move was a personal investment decision of Agarwal and he had no acquisition plans in mind. The move gained a lot of attention with the British media calling it a "raid" and "share grab". Anglo American is yet to react to Agarwal's share purchase.
A source close to the businessman said Vedanta will not push for a board seat as of now. "We don't know what happens tomorrow," the official said. Anglo American and Vedanta shares rode up 9 and 10 per cent respectively, last week. Major bankers who have experience working with both the companies said the investment deal is "not friendly, though not necessarily hostile".
Agarwal had approached Anglo American with a merger proposal last year, which was summarily rejected.
