Oppenheimers+dump+Anglo,+Julie+Bain,+Sunday+Times

Sunday Times, Johannesburg, 12 November 2006
=Oppenheimers dump Anglo=

//Grandchildren of company’s founder sell R5.9bn in shares and seek out non-mining assets, writes// **Julie Bain**

The Oppenheimer family business has cut its stake in Anglo American by a third as it looks outside mining to secure the family dynasty.

E Oppenheimer & Son said on Friday it had sold 17million shares, equivalent to a stake of 1.13% in Anglo, worth R5.9-billion at Friday’s share price, to China Vision Resouces, Chinese businessman Larry Yung’s private investment vehicle. Yung is China’s second-richest man, according to Forbes magazine. He heads the acquisitive Chinese conglomerate CITIC Pacific.

“We were delighted that, when we started thinking about this, we were put together [with Yung]. He is now a serious shareholder in Anglo and may be of value in that regard,” said Nicky Oppenheimer.

Oppenheimer is chairman of the world’s biggest diamond producer De Beers, in which the Oppenheimer family has a 40% stake. E Oppenheimer & Son, the family’s investment vehicle, will continue to hold more than 2% of Anglo, worth R11.5-billion.

The sale comes at a time of flux for Anglo American, which is in the middle of a restructuring. The world’s second-biggest mining company is expected to separately list its paper and packaging business, Mondi, in London next year. And there has been speculation that it may be a takeover target.

Last month Anglo appointed Alcan executive Cynthia Carroll to replace CEO Tony Trahar.

Patrice Rassou, a fund manager at Sanlam Investment Management, said: “The interesting thing is he [Yung] invested in his own capacity. For me it does not smell of corporate activity.”

He said it was interesting that the statement made a point of emphasising the Oppenheimer family’s backing of Anglo.

“The family has gone to great pains to telegraph to the market they are not doing it for any other than investment reasons. The issue is all very sensitive. From a South African point of view there has been a series of events which have shown Anglo is moving further from SA,” said Rassou.

Oppenheimer rejected any suggestion of the sale being a vote of no confidence in Anglo.

“The family continues to have every confidence in the future of Anglo American and fully supports Tony Trahar, the management team and the restructuring process currently under way.

“Further, we believe the recent appointment of Cynthia Carroll is positive and that she is just the right person to lead Anglo into the future,” he said.

“It is simply a question of asset allocation. There has been a concern that the family assets were too focused on the mining sector,” said Oppenheimer.

“I had to, and Mary [his sister] had to, think of our grandchildren. We needed to balance the portfolio.”

He said the family now wants to invest in “sectors that are traditionally counter-cyclical to its major investments in the [mining] industry”.

Rassou said: “The Oppenheimers are talking about diversifying their portfolio, and from their perspective it is the right thing to do — simply from the point of view that the share price is at a record high.”

The sale further reduces the family’s influence in the company that Nicky Oppenheimer’s grandfather, Ernest Oppenheimer, established in 1917.

“In the family we did have an emotional debate when we talked about changing the asset allocation, but the logic of what we are doing is irrefutable. Selling Anglo shares is always a difficult thing to do,” said Oppenheimer.

Now the family, which became billionaires through mining investments in SA, plans to search for investments across Africa to grow its business.

E Oppenheimer & Son has appointed Duncan Randall, a former chief executive of FNB Enterprise Solutions, to head up the new investment vehicle. Although it is not ruling out further mining investments, non-mining investments will be favoured.

“We are focusing investments north of South Africa initially,” said James Teeger, managing director of E Oppenheimer & Son. “We envisage investing in non- mining assets. We have been in Nigeria, Kenya, Uganda and Morocco.”

The fact that the stake has been bought by a Chinese businessman reflects the increasing strength of emerging economies such as China and India, said Sanusha Naidu, research fellow at the Centre for Chinese Studies at Stellenbosch University.


 * From: http://www.sundaytimes.co.za/PrintEdition/BusinessTimes/Article.aspx?id=315770**

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