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Sirius Minerals bidder Anglo American upgraded by Barclays Capital

The investment banking arm of the high street lender has moved to ‘overweight’ on the stock in the group, raising its price target 40% to £28 a share in the process

Sirius Minerals PLC -

Barclays Capital said the “stars have aligned”, allowing it to upgrade Sirius Minerals PLC (LON:SXX) bidder Anglo American (LON:AAL).

The investment banking arm of the high street lender has moved to ‘overweight’ on the stock in the group, raising its price target 40% to £28 a share in the process.

Barclays said Anglo is now trading at a 25% valuation discount to its peer group – the widest in five years – yet the company has a “sector-leading growth” profile.

“Anglo offers lower exposure to iron ore than diversified peers and is actively re-orienting the portfolio away from the Chinese steel supply chain,” said the bank.

“We see all of these as grounds for Anglo to re-rate versus its peers.”

The shares, down 11% in the year to date, were changing hands for 1,956p, up 14p.

Anglo American is in the midst of a messy £404mln takeover of punters’ favourite Sirius Minerals, which ran into funding problems last year.

The bid, which had been expected to go through on the nod, is now the focus of interest from Odey Asset Management, which reckons Anglo has the scope to increase its bid by 40% to 7p a share.

Odey, and other dissident investors, could block the deal.

Quick facts: Sirius Minerals PLC

Price: 5.49 GBX

LSE:SXX
Market: LSE
Market Cap: £385.41 m
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