What about Kumba?

Finweek English Edition - - MARKETPLACE SIMON SAYS -

An­glo Amer­i­can ex­ited its 9.7% stake in Exxaro, while the BEE part­ner sold 5%. For An­glo Amer­i­can the price of 8 700c per share was 10% be­low the mar­ket price and well off the highs of over R200 for Exxaro, but it is a de­cent price con­sid­er­ing Exxaro has been be­low 4 000c since last De­cem­ber. The ques­tion now is what hap­pens to Kumba. An­glo Amer­i­can has stated it wants to exit iron ore and sell­ing 9.7% in Exxaro is easy enough. But sell­ing its 69.7% stake in Kumba is not go­ing to be easy. With the Kumba share price up some eight­fold from its De­cem­ber 2015 lows, this is a good time to sell. The prob­lem is the size of the stake. A book build as done with Exxaro is not fea­si­ble, so ei­ther a piece­meal sale or a one-off un­bundling to share­hold­ers will oc­cur. As I have stated be­fore, an un­bundling will put se­ri­ous pres­sure on the share price as one can as­sume a sig­nif­i­cant num­ber of those re­ceiv­ing the shares would sell them, putting down­ward pres­sure on the price. I would be a ner­vous share­holder un­less An­glo changes its mind, and surely it wouldn’t do that? Maybe it’s time for some profit-tak­ing from Kumba share­hold­ers.

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