What about Kumba?
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.