Rio Tinto PLC and Glencore PLC (LSE:GLEN) could be eyeing up Anglo American PLC (LSE:AAL) as a potential takeover target following a rejected bid from BHP Group Ltd (LSE:BHP, ASX:BHP), analysts say.
Citing Bloomberg, Jefferies analysts noted the likelihood of other bidders for Anglo-American in a note.
“From a strategic perspective, Anglo could be a good fit for Glencore and Rio,” the bank wrote in response.
For Rio, Anglo’s copper mining wing would be an “excellent addition”, analysts said, adding antitrust hurdles may not be so bad compared with Glencore and BHP.
Indeed, Glencore and Anglo’s exposure to coal could prompt regulatory scrutiny of a deal between the two, the bank continued, but not in iron ore.
This could see the Kumba project in South Africa kept open under a bid from Glencore, unlike proposed plans for BHP’s takeover.
“Glencore could benefit from keeping Kumba and marketing iron ore [...] may face less political pushback in South Africa,” Jefferies said.
“Especially if it were to propose a straightforward all-share deal that does not include [...] demergers.”
Jefferies added Freeport, Barrick, Newmont and Vale were unlikely to want to get involved in a bidding war, given the likelihood of internal changes and each may only be interested in Anglo’s copper business.
Analysts have previously suggested an improved offer from BHP is likely for Anglo after last week’s rejected £31 billion bid.
Activist investor Elliott Investment Management has since been upping its stake in the mining company, suggesting it believes the offer is too low.