Anglo American PLC (LON:AAL) saw its shares rise today on news Volcan Investments, the family trust of Anil Agarwal, the chairman of diversified miner Vedanta Resources PLC (LON:VED) is looking to increase its stake in the FTSE 100-listed firm to around 20%.
In a statement, Volcan said it is to acquire shares in Anglo American worth between £1.25bn and £1.5bn, equivalent to 7.5%-9.0% of the company, in addition to the £2bn it spent on acquiring a 12.43% holding in March.
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Following a recovery by commodity markets, Anglo American's shares have risen by more than 11% so far this year, building on a nearly 30% rally last year, which saw it lead the gainers on the London stock market.
In mid-morning trading today, Anglo American shares were up 2.8%, or 36p at 1,330p.
Agarwal said in today’s statement: "We are encouraged by the performance of Anglo American since our original investment earlier this year.
“The company has made good progress in its operational and financial performance and remains an attractive investment for our family trust."
No takeover plans
Agarwal has previously stated he has no plans to take over Anglo American, although his family trust is now the second biggest stakeholder after South Africa's state-owned Public Investment Corporation.
In a note to clients today, UBS pointed out that Agarwal publically confirmed at Davos this January that “’there was a proposal that Hindustan Zinc [which is 65% owned by Vedanta Ltd] and Anglo should merge,’ but this was rebuffed by Anglo.”
However, the Swiss broker noted that Agarwal has described the Anglo American holding as a ‘personal investment’ and again confirmed he does not intend to make a takeover offer for the blue chip miner, which prevents him from making a bid for 6 months under the UK Takeover Code.
Volcan Investments owns 69% of Vedanta.