Mr Kirk

[DOGS THAT BARK]

Somehow I can't decipher what has actually ocurred here--and whether its good-bad or of no consequence--any thoughts--

Anglo American: Shareholders approve Mondi spinoff

By Steve Goldstein
Last Update: 2:33 AM ET Jun 26, 2007


LONDON (MarketWatch) -- Anglo American (AAUK : anglo amern plc adr
News , chart , profile , more
Last: 29.25+0.08+0.27%

8:27am 06/28/2007

UK:AAL2,881.00, -26.00, -0.9%) said it's received shareholder approval to spin off Mondi Group, its paper and packaging subsidiary. For every 100 Anglo American shares, investors will get 25 Mondi plc shares, which will hold Mondi's non-African assets, and 10 Mondi Limited shares, which will hold Mondi's African assets, as well as 91 new Anglo American shares.

 

[selkirk]

DTB in general it is probably positive and that depends..... what a straight forward answer...lol.

ex... most companies are pure plays. ie: gold, silver, oil/gas. there are not to many resource plays.

Anglo is compared to some very large int. mining companies....Rio, Xstrata, BHP, ect.
investors do not want a company that owns paper company. when the buy a company like this they want a pure play on the mining sector.

Also mining does not have anything to do with paper. the paper business is weak, most of the stocks in this sector have not performed well.
so they are not valued highly in Anglo.
they also probably think they are to cheap to sell at this point, so they just decided to spin if off to shareholders.

Anglo has not taken to many companies over Xstrata, Rio, CVRD, BHP have all made large purchases, and worked out. ie. Xstrata and CVRD purchase of Falconbridge and Inco, going to pay for it self in 3-4 years.
so these companies are spinning, or printing cash.

anglo is in catch up mode. they are spending over 1.5 billion in brazil...iron ore, and are going to spend over 3.5 billion in Afirca over 5 years....probably 4 billion.

they want to show the market a pure metals play.
should note: they sold down their position in Ashanti from over 50% to 42%... to raise the money, time will tell and gold if this was wise.

so in general the market probably did not put a good value on these assets, and they are beaten down, so good to spin them out and see if management can get more value for them, in the market and shareholders.

long term good for company, pure play mining stock now, and shareholders get a pure play paper/packaging they can keep or sell.

the only negative is that Anglo might be taken over by these other companies that have bought other companies and are getting much larger. so there is a couple of dollars in the share price on takeover.....okay 1-2 .

you could takeover the company and sell the paper company, maybe make it easier to take over....just a thought.

at the end of the day positive, however the company will sink or swim on metal prices.....

2007 earnings 2.35 2008 2.10. note the esitamates are all over the board, difference of .50

thanks
selkirk

 

[selkirk]

by the way the negative I mean is that maybe a takeover is harder, since a purchaser could have sold off the paper company to help pay for anglo.

if someone does buy anglo, just rumours in a heated market, they will just want a mining play.

thanks
selkirk

 

[DOGS THAT BARK]

as always appreciate the input--thank you