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

London-listed miner Anglo American has received an all-share acquisition proposal from BHP Group, setting up a potential mega deal that would create the world’s largest copper mine, producing around 10 percent of global output .

If the deal is approved, it would also lead to further transactions in the global mining sector, which has seen a slew of mergers and acquisitions as companies review their assets to increase exposure to metals considered critical to the energy transition.

The proposal comes after Anglo, which had a market capitalization of $37.7 billion as of Wednesday’s end, began a review of its assets in February following a 94 percent drop in annual profits and a series of writedowns following a drop in demand for most of the metals it mines.

Anglo owns mines in Chile, South Africa, Brazil and Australia, among others.

BHP, the world’s largest publicly traded miner and best known for mining iron ore, copper, coking coal, potash and nickel, had a market capitalization of about $149 billion on Wednesday.

Shares of Tesla rose more than 12 percent after the company promised to bring forward the launch of “affordable” cars.

The electric car maker said production could start this year as the group led by technology billionaire Elon Musk suffered its biggest sales decline in more than a decade as demand fell.

On Tuesday it posted sales of £17bn for the three months to the end of March, down 9 per cent on the previous year and the biggest slump since 2012.

Profits fell 86 percent to £910 million, compared to £6.4 billion a year ago.

Sainsbury’s has forecast strong profit growth for the new financial year as Britain’s second-largest supermarket group beat expectations with a 1.6 per cent increase for 2023/2024.

The group, which has a 15.3 percent share of the UK supermarket market behind only Tesco, is benefiting from a strategy to match discounter Aldi’s prices on essential items and offer better prices to members of its loyalty program Nectar, funded by taking £1.3 billion of costs out of the business over the past three years.

Underlying pre-tax profit was £701m in the year to March 2 – higher than company expectations of £670m to £700m, and the £690m earned in 2022/2023.

CEO Simon Roberts said:

‘We said we would put food back at the heart of Sainsbury’s and we have done just that. Our food sector is firing on all cylinders.

‘We have the best combination of value and quality in the market and that ensures we win customers over all our main competitors, driving consistent volume growth in our market share as more customers choose us for their weekly shopping and all their special occasions .

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

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

The owner of London’s stock market is facing a backlash from investors over plans to more than double his boss’s salary.

The London Stock Exchange Group (LSEG) wants to increase the maximum salary of CEO David Schwimmer from £6.25 million to £13 million.

Investors will vote today on whether to allow the almost £7 million pay rise at the annual general meeting, as they search around town to determine the health of the stock market over which Schwimmer chairs.

Analysts have warned that a ‘relentless’ wave of takeover activity, amounting to a ‘feeding frenzy’ on undervalued UK shares, has threatened the stock market with ‘a thousand cuts’.

Barclays’ profits fell 12 percent in the first quarter as pressure on UK mortgage prices, lower trading income and a drought in merger and acquisition costs highlighted the difficulties the company will face as it implements its first strategic overhaul in ten year.

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

Barclays is trying to restore investor confidence in its universal banking business model after years of underperforming share prices, clashes with activists over the role of its investment bank and management turnover.

Boss CS Venkatakrishnan said:

“We are focused on disciplined execution of the plan we presented during our Investor Update on February 20.

‘We have now announced the sale of our high-performing Italian mortgage portfolio and investment in our higher-yielding UK consumer business, including through the expected completion of the acquisition of Tesco Bank in the fourth quarter.

“We continue to exercise cost discipline and remain well capitalized with a quarter-end Common Equity Tier 1 (CET1) ratio of 13.5%.”