Equity Insights
By Chantal Marx
Anglo American (AGL) - Demerger of Valterra Platinum and Share Consolidation
Anglo American plc (AGL) will demerge a portion of its stake in Valterra Platinum Ltd (VAL) to AGL shareholders, in the ratio of 110 VAL shares per 1 075 AGL shares held. This will be immediately followed by a share consolidation in the ratio of 96 AGL shares for every 109 AGL shares held.
VAL is currently trading as Anglo American Platinum (AMS), but the name change will become effective prior to VAL shares reflecting in broker accounts.
After the consolidation, AGL's issued ordinary shares of 1 337 577 913 will be consolidated to 1 178 050 272 ordinary shares. In theory, the consolidation will increase AGL's market price, earnings per share and net asset value per share by 1.135 times. While this will be impacted by the demerger of VAL, the net impact on the share price will be negligible. The market capitalisation (or total market value of AGL), total earnings and total net asset value per share will be impacted by the demerger, but not by the share consolidation.
Based on AGL and AMS's last closing market capitalisations (19 May 2025) the theoretical share price after the demerger and consolidation should be R493.15 per share. Shareholders' gross financial exposure will not change, ceteris paribus.
Fractional entitlements will be rounded down to the nearest whole number, with cash payments in respect of these entitlements to be announced by 11:00 on Tuesday, 3 June 2025.
The distribution of the VAL shares will be regarded as a foreign dividend in specie and will not be subject to Dividends Tax. For income tax purposes, South African taxpayers will be taxed at an effective rate of 20% (if applicable). The VAL shares will carry a cost equal to their market value. The share consolidation will be tax neutral. Fractional entitlements will be settled in cash and will be a taxable event.
FNB Stockbroking and Portfolio Management View
Appendix A: Worked example for an investor with 1 000 Anglo American Shares
Holdings before the demerger and unbundling (using 19 May prices):
Total Holding Value: R496.85 * 1 000 = R496 850
Holdings after the demerger (using 19 May prices):
Total Holding Value: R497 586.20*
Holdings after the demerger and the consolidation (using 19 May prices):
Total Holding Value: R 497 586.50**
*Increase in total value due to relative outperformance of VAL after the unbundling ratio was determined.
**Difference due to rounding.
