Anglo American Says No Again to BHP, But Talks Keep Going
Talks between mining giants Anglo American and BHP hit a snag as Anglo American rejected BHP’s latest offer to buy them. BHP sweetened the pot to £38.6 billion (R887 billion), but it wasn’t enough.
Here’s why the deal is stuck: BHP’s offer hinges on Anglo American splitting off its Kumba iron ore and platinum businesses. Anglo American says this is a messy process that could take over a year and might not go smoothly. They’d rather stick to their own plan of selling their diamond business and fully separating the platinum unit, which is already listed.
Despite the rejection, both sides are giving it another shot. They extended the deadline for BHP to make a final offer until May 29th. This means there’s still room for a compromise. Analysts think BHP might need to offer Anglo American shareholders a bigger bonus for the trouble of this complex takeover. Maybe some cash on top of the stock offer could do the trick.
Even though the deal is on hold, analysts still recommend Anglo American and BHP (along with Glencore) as good bets for investors looking to put their money in mining companies.
Transaction Capital (JSE: TCP)
Transaction Capital, a JSE-listed company, disclosed a headline loss of 164 cents per share for the six months ending March 31, 2024, an improvement from the previous year’s loss of 224.6 cents. Notable during this period was the separation and listing of WeBuyCars on the JSE main board, resulting in a distribution of 256.3 million shares worth R5.2 billion to shareholders, enabling Transaction Capital to reduce debt and achieve a net cash position.
The company proposed a restructuring plan for SA Taxi to mitigate losses on its loan portfolio, with a focus on cash preservation over profit optimization until the restructuring is complete, affecting the earnings outlook for the full year.
Meanwhile, Nutun, Transaction Capital’s subsidiary comprising a BPO business and a debt collection segment, experienced cost increases, leading to a 14% decline in core earnings attributable to the group. Delayed business volume increases created a cost-income mismatch, prompting the streamlining of Nutun’s operations into two distinct businesses to unlock shareholder value in the medium term.
Analysts anticipate a gradual normalization of Nutun’s operations due to ongoing restructuring. However, the lack of equity value in SA Taxi poses a risk to Nutun’s financing strategy, despite Transaction Capital’s simplified operations, absence of debt, and positive cash flow being seen as positives for investors. Following the results release, Transaction Capital’s shares traded approximately 3.6% weaker by midday.
Nvidia Corp (NASDAQ: NVDA)
Nvidia (NVDA) stock surged by 9.3% on Thursday, crossing the $1,000 mark for the first time, elevating the chip giant’s market cap beyond $2.5 trillion following an impressive first-quarter earnings report. The company’s Q1 results, revealed after Wednesday’s closing bell, showcased adjusted earnings per share (EPS) at $6.12 on revenue totaling $26 billion, marking an extraordinary increase of 461% and 262% respectively compared to the previous year.MNvidia also disclosed plans for a 10-for-1 stock split alongside an augmented dividend, mirroring actions taken by other major tech firms to provide greater returns to shareholders.
Data Center revenue soared by 427% year-over-year, constituting 86% of Nvidia’s total revenue for the quarter, with gaming revenue at $2.6 billion. CFO Colette Kress noted that large cloud providers contributed approximately 45% of the Data Center revenue.
JPMorgan analysts raised their price target on Nvidia stock to $1,150, praising the company’s market leadership. However, Nvidia faced challenges in China due to restrictions on chip shipments, anticipating continued competitive dynamics in the region.
Sources: MoneyWeb; News24; CNBC.
Piece written by Trive Sales Trader, Kealeboga Molefe
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