Anglo American/Mondi update

24 February 2006 – London (UK): Anglo American has told opi.net that plans to list Mondi on the LSE at the end of 2006/start of 2007 was part of an effort to concentrate on its core businesses.
 
"We recognise that there are only limited synergies with our mining portfolio and therefore a decision has been taken to list Mondi on the LSE in 2006/7," said a spokesman for the company. "We believe Mondi has further growth potential for Anglo shareholders and it is in the Group’s interest to prepare Mondi for listing." 
 
Citigroup analysts upgraded Anglo American from Hold to Buy following announcement of the news. 
 
Anglo American also revealed that they have been approached by interested parties with a view to buying the paper and packaging business.
 
A London-based analyst said Anglo’s plans for listing the company are "a good move, it’s good for the shareholders to have clarity".
 
The Group’s preferred option for Mondi is an initial public offering of a 20-25 per cent stake in London in the next year. Mondi’s value will depend on how much debt Anglo transfers to it, but analysts expect it to go into the FTSE 100 index with a worth of around $6 billion to $8 billion, making it the biggest paper and packaging business on the London stock market.
 
The decision to spin-off its paper arm is part of a strategic review that was first announced on 26 October last year. 
 
A Merrill Lynch research report into Anglo’s strategic plan praised Mondi’s performance. It said: "Despite the massively difficult trading conditions in Europe the fact that Mondi still achieved a $495 million operating profit is testament to the group’s growth model, which has sought to buy and grow assets in Eastern Europe, which are then well placed to sell their products into Western Europe."