De Beers offer sweetened after institutions demur

The bid by a group led by Anglo American (AAUK-Q) to take De Beers Consolidated Mines (DBRSY-Q) private has been raised by US$2 for the benefit of minority shareholders who were holding out for a better deal.

The bidder, DB Investments, is a partnership of Anglo and the Oppenheimer family (each with 45%) and Debswana Diamond, the Botswana-based operating company jointly owned by De Beers and the Botswanan government. In a bid announced Feb. 15, DBI sought to buy out De Beers (and its publicly traded subsidiary De Beers Centenary) for US$14.40, plus 0.43 of an Anglo share, plus a final US$1 dividend on De Beers shares.

Two U.S. investment management houses, Brandes Investment Partners and Southeastern Asset Management, who together controlled the voting of about 10% of the outstanding De Beers shares, stated publicly that the offer was too low. A third institutional firm, Old Mutual Asset Managers, was considered a possible “swing vote” with 8% of the shares.