BUSINESS LIVE: Barclays profits slip; Sainsbury’s ups guidance; BHP eyes Anglo American deal

London-listed miner Anglo American has received an all-share buyout proposal from BHP Group, lining-up a potential megadeal that would create the world’s biggest copper miner churning out around 10 per cent of global output.

The deal, if agreed, would also trigger further transactions in the global mining industry, which has seen a slew of mergers and acquisitions as companies review their assets to raise exposure to metals deemed critical to the energy transition.

The proposal comes after Anglo, which had a market capitalisation of $37.7billion as of Wednesday’s close, began a review of its assets in February after a 94 per cent plunge in annual profit and a series of writedowns due to a fall in demand for most of the metals it mines.

Anglo owns mines in countries including Chile, South Africa, Brazil and Australia.

BHP, the world’s biggest listed miner and best-known for mining iron ore, copper, coking coal, potash and nickel, had a market capitalisation of about $149billion as of Wednesday.

Tesla shares surged more than 12 per cent after it pledged to bring forward the launch of ‘more affordable’ cars.

The electric car maker said production could start this year, as the group run by tech billionaire Elon Musk suffered its biggest drop in revenue in over a decade as demand stalls.

On Tuesday it posted sales of £17billion for the three months to the end of March, a 9 per cent fall from the year before and the largest slump since 2012.

Profits fell 86 per cent to £910million compared to £6.4billion a year ago.

Sainsbury’s has forecast strong profit growth in its new financial year as Britain’s second biggest supermarket group beat guidance with a 1.6 per cent rise for 2023/24.

The group, which has a 15.3 per cent share of Britain’s grocery market trailing only Tesco, is getting success from a strategy of matching discounter Aldi’s prices on essential items and providing better prices for members of its Nectar loyalty scheme, financed by taking £1.3billion of costs out of the business over the last three years.

Underlying pre-tax profit was £701million in the year to 2 March – ahead of company guidance of £670million to £700million, and the £690million made in 2022/23.

Chief executive Simon Roberts said:

‘We said we’d put food back at the heart of Sainsbury’s and that’s what we’ve done. Our food business is firing on all cylinders.

‘We have the best combination of value and quality in the market and that’s winning us customers from all our key competitors, driving consistent volume market share growth as more customers choose us for their weekly shop and all their special occasions.

‘As we embark on our Next Level Sainsbury’s strategy, we’ll continue to make deliberate, balanced choices to support our customers, colleagues, communities and farmers.

‘The business has real momentum and we’re excited by our goal of making good food joyful, accessible and affordable for everyone, every day.”

The owner of London’s stock market is facing an investor backlash over plans to more than double its boss’s pay.

London Stock Exchange Group (LSEG) wants to up chief executive David Schwimmer’s maximum pay from £6.25million to £13million.

Investors will vote today on whether to allow the near-£7million pay rise, at the annual general meeting amid soul searching in the City over the health of the stock market over which Schwimmer presides.

Analysts warn that a ‘relentless’ wave of takeover activity, amounting to a ‘feeding frenzy’ on undervalued British stocks, has left the exchange facing ‘death by a thousand cuts’.

Barclays profits slipped 12 per cent in the first quarter as a squeeze on UK mortgage pricing, lower income from trading and a drought of M&A fees showed the difficulties it will face in delivering its first strategic revamp in a decade.

The lender posted a pre-tax profit of almost £2.3billion for the three months to 31 March, down from £2.6billion a year earlier and in line with forecasts of £2.2billion.

Barclays is bidding to restore investor faith in its universal banking business model, after years of share price underperformance, clashes with activists over the role of its investment bank, and management turnover.

Boss C.S. Venkatakrishnan said:

‘We are focused on disciplined execution of the plan that we presented at our Investor Update on 20th February.

‘We have now announced the sale of our performing Italian mortgage book and are investing in our higher returning UK consumer businesses, including through the expected completion of the Tesco Bank acquisition in Q424.

‘We continue to exercise cost discipline and remain well capitalised with a Common Equity Tier 1 (CET1) ratio at the end of the quarter of 13.5%.’