Jefferies reiterates 'buy' on Anglo American, cites coal exit

(Sharecast News) - Jefferies reiterated its 'buy' rating on Anglo American on Tuesday after the miner announced an agreement to sell its portfolio of steelmaking coal mines in Australia to private UK mining company Dhilmar for up to $3.9bn in cash.

Anglo said on Monday that the price comprises an upfront cash consideration of $2.3bn payable at completion and a price-linked earnout of up to $1.6bn.

Jefferies - which kept its price target on the stock at 4,200p - said it had expected a portion of the sale price to be contingent/deferred, but this is a higher all-in price than it anticipated.

"This sale will progress Anglo's portfolio simplification and is a positive, in our view," Jefferies said. "Anglo has been one of our top picks, and we reiterate our buy rating following this news."

At 1350 BST, Anglo shares were down 1.2% at 3,736p.

Anglo American