Anglo American share spike before bid raises questions about leaks
25/04/2024 17:51
By Sinead Cruise, Kirstin Ridley and Samuel Indyk
LONDON, April 25 (Reuters) - Anglo American's AAL.L
London-listed shares spiked in late UK trade on Wednesday, hours
before the miner announced a $39 billion bid by rival BHP Group
BHP.AX , raising questions from some lawyers, investors and
commentators about possible leaks.
Shares in Anglo rose by around 2.8% between 1500 GMT and the
market close at 1530 GMT in London on Wednesday. Anglo issued a
statement around 2300 GMT saying it had received an approach
from BHP.
The late bounce before the bid proposal was revealed, which
if successful would forge the world's biggest copper miner,
contrasted with modest share price gains of between 0.2-0.5% at
Anglo's peers Rio Tinto RIO.L , Glencore GLEN.L and
Antofagasta ANTO.L in the 35 minutes before the London market
closed.
"This spike in Anglo's share price before the public
announcement of the BHP bid raises questions about the integrity
of the UK's markets which the Financial Conduct Authority (FCA)
are likely to want to investigate," said Harvey Knight, head of
the financial services regulatory group at law firm Withers LLP.
Britain's FCA does not typically comment on individual
trading irregularities which it investigates and declined to
comment on whether it would review the activity.
In a statement emailed to Reuters, the regulator said it
"cannot comment on individual cases".
A spokesperson for Anglo American declined to comment when
asked whether the company had contacted the FCA about any
potential irregular trading or whether the regulator had been in
touch.
"The price spiked significantly. Someone was either very
lucky or very knowledgeable," said Richard Bernstein, chief
investment officer of activist investor Crystal Amber.
Shares in miners like Anglo can move sharply following
changes in commodity prices, or major currencies like sterling
and the U.S. dollar.
Regulated companies and individuals in Britain have an
obligation to detect and report suspicious trading if there are
reasonable grounds to suspect market abuse, such as insider
dealing or market manipulation.
"Between private chat networks, secure texting apps, and
even burner phones, there are many more ways for material,
non-public information to be shared via undetected means than
there ever were previously," Peter C. Earle, Senior Economist,
The American Institute for Economic Research, told Reuters.
"The financial markets are in an information dissemination
arms race. Some of it is above board, and some of it below."
(Reporting By Sinead Cruise, Kirstin Ridley and Samuel Indyk
Additional reporting by Amanda Cooper and Nell Mackenzie Editing
by Elisa Martinuzzi and Elaine Hardcastle)
((sinead.cruise@thomsonreuters.com; 020 7513 5026; Reuters
Messaging: sinead.cruise.thomsonreuters.com@reuters.net))