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Anglo American weighs up $7bn bid for Walter Energy
From:The Australian
September 13, 201112:00AM
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Cynthia Carroll, Anglo American chief executive. Picture: Lyndon Mechielsen Source: The Courier-Mail
ANGLO American is considering a $US7.5 billion ($7.27bn) bid for a US coalmining giant just weeks after it dropped out of a battle for a smaller Australian rival.
Walter Energy is the world's largest producer of coal used for steelmaking. Its shares, listed in New York, jumped by more than 20 per cent last week amid growing speculation that Anglo was about to launch an offer.
Anglo chief executive Cynthia Carroll is keen to reduce the FTSE100 group's exposure to South Africa, its traditional base.
Power shortages and fraught labour relations make it difficult to do business there.
Sources close to the company, which also owns almost half of diamond group De Beers, cautioned that it was still early days.
Walter was one of several prospects Anglo was sizing up, the sources said. It has not yet hired an investment bank as an adviser.

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The likely bid is the clearest sign yet of a big shift in focus at the company. Since taking over four years ago, Ms Carroll has spent much of her time cutting costs and selling divisions.
Last month, however, she came close to jumping into the tussle for Macarthur Coal after it received a $US4.7bn bid from steel giant ArcelorMittal and Peabody Energy, one of the world's biggest coalminers. She bowed out after the suitors sweetened their bid.
Walter would be the biggest acquisition on her watch and the first move into coal in more than a decade. Anglo bought Royal Dutch Shell's Australian coal arm in 2000. Since then, demand for the commodity has soared.
Walter specialises in coking coal, used in steel production, for which demand is booming.
If Carroll did make a move for Walter, especially at the mooted $US120 a share, it is likely to be received coolly by investors.
Walter's shares closed on Friday at $US88.22, valuing it at $US5.5bn. Walter was put in play in July when activist hedge fund Audley Capital wrote to the board calling for it to seek a buyer.
THE SUNDAY TIMES