Masisi seeks assurances as Anglo shakes off BHP bid

Mbongeni Mguni | Monday June 3, 2024 08:25

Briefing journalists at the airport in Gaborone on Wednesday ahead of a flight to the JCK Show in Las Vegas, Masisi said he was seeking first-hand assurances.

“The reason for travelling (to Las Vegas) is to go and get that first hand from the principle managers and owners of both Anglo American and De Beers that they are committed to separating De Beers from Anglo before Anglo is sold, if it is sold,” he said. “It’s in our interest.”

He continued: “We are by far the biggest diamond producer by value and there’s no other country for which diamonds mean as much as they do than Botswana. “Our whole budget, our livelihood is dependent on what happens in that industry.”

Anglo, which owns 85% of De Beers, with government holding the balance, plans to dispose of its interest in the diamond company by the end of next year. However, until Wednesday, Anglo itself was the target of a month-long takeover bid by BHP, the world’s biggest mining group.

BHP abandoned its bid this week, after three rejected offers and the failure to secure a result from negotiations with Anglo. The talks began last Wednesday and the time allotted for them elapsed with a positive result on May 29.

However, BHP’s pursuit of Anglo pressured the latter to announce its own strategic review, which includes disposing of its De Beers’ shareholding.

Masisi’s comments on Wednesday are his administration’s most revealing since BHP shook the diamond world in late April with a $39 billion offer for Anglo American.

While Masisi and the Permanent Secretary to the President, Emma Peloetletse, have previously limited their comments on the recent developments to assurances that the country’s interests will be protected, on Wednesday, the head of state shared the government’s strategic focus.

“If Anglo rejects this third bid, they expose themselves to a hostile takeover where those who want to buy them approach the shareholders directly,” the President said. “We are concerned as the government and we are watching this very closely because whoever buys Anglo American will then become the 85% owner of De Beers and De Beers is our strategic partner with whom we have been negotiating and are at the tail-end of signing agreements with them. “We don’t want a hostile owner and we are clear about that.”

While Bloomberg has reported that BHP will not mount a hostile offer for Anglo, it’s possible other suitors for Anglo could emerge with more aggressive approaches for a takeover.

The failure of the BHP bid, meanwhile, means government will have to soon decide whether or not to exercise its pre-emptive rights in the De Beers’ disposal planned by Anglo. The Minerals Development Company Botswana is expected to play a central role in the decision, through its position as minerals policy advisor to government.

At Wednesday’s briefing, Masisi did not take questions, but alluded to the fact that the government’s immediate priority is a finalisation of the long-awaited sales agreement with De Beers.

Both parties have given themselves until June 28 to finalise an agreement that has been described on both sides as “transformative” containing the most concessions made by De Beers since the partnership with government began in the 1970s.

Anglo American has already assured that it would abide by the terms agreed to in government’s agreement with De Beers.