Aggregate and asphalt company Tarmac is on the block, with $6B USD being the estimated price. Not bad for $315M USD in earnings. This is 20x earnings. Tarmac is owned by Anglo, and its valuation is good for both Anglo and for any potential takeover bidder for Anglo. The more lean and focused they make the company, the more attractive they make it to bidders. When others are bulking up in size (take Rio-Alcan, CVRD-Inco, etc.), Anglo is doing small aquistions and selling off bits that do not fit. By getting rid of Mondi and now Tarmac, they are streamlining themselves. The real question is whether they can then reinvest smartly.
They are putting up a good fight, and either they will make it or they will not, but they will have to buy more decently earning assets. I would recomend that they go to Rio Tinto and see what is for sale, like perhaps the coal business? There is also a diamond mine or two that Rio might be willing to sell.
Buy assets, do not give cash back to shareholders. A smaller, leaner Anglo is just too tempting a morsel.
