Suitors size up Anglo’s $7.5b coal as sets | Another bank pops up at I-MED | Xpansi v sell down

Good evening,

Suitors sizing up Anglo American’s circa $US5 billion ($7.5 billion) Australian coal assets have the miner’s results day – July 25 – circled in their calendars, hoping for more details about the earnings hit from a massive fire at Grosvenor as they prepare for the data room to open.

Sources said Anglo American’s sell-side advisers, Morgan Stanley and Goldman Sachs, have told bidders to expect confidentiality agreements to be processed by the end of the month. Letters detailing bid deadlines as well as due diligence materials, should be out in August. Historically, first-round offers are set for six weeks after the data room opens.

For now, potential bidders are working off Anglo American’s London Stock Exchange filings, which list Grosvenor’s production at 3.5 million tonnes of the 15 million tonnes to 17 million tonnes total for 2024. Where it gets tricky is this: Grosvenor shares infrastructure with Anglo’s nearby Moranbah mine and together, these are the crown jewels of its Australian coal empire.

Sharp-nosed suitors are expected to push for Anglo American to accept a significant portion of the bid value as deferred consideration, which would be tied to Grosvenor’s future performance. The underground mine only produced its first coal in 2016 and has had several incidents.

Should Anglo American accept deferred consideration for the asset, it could shave off a couple of billion dollars from the upfront deal price and widen the field of bidders. Bidders would also be thinking about Foreign Investment Review Board approvals and any rehabilitation liabilities.

“The sale process is well under way and there is strong interest in this world-class set of steelmaking coal assets from a large number of parties,” an Anglo American spokesperson said on Sunday.

Read the full story tomorrow and more on the Street Talk page.

Australian shares fell to their third session of losses last week as falling commodity prices pressured the mining sector, and technology stocks tracked a sell-off on Wall Street.

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