Anglo’s De Beers attracts interest from India’s Agarwal, Qatari funds: sources

“The diamond IPO market is just littered with failure … because the diamond business is long-term,” said James Campbell, MD of Botswana Diamonds.

“You need to invest very heavily in marketing to maintain your product. In today’s world, you’re managed to a large degree by fund managers who want quarterly performance.”

QATAR INTEREST

Former De Beers CEO Gareth Penny, now chair of asset manager Ninety One, is also looking at putting together a consortium, backed by a Qatari investment fund, two sources close to the process said. He would become chair of the potential new company, one of the sources added.

Though Qatar’s QIA sovereign wealth fund had decided against a bid after showing initial interest, other Qatari investment funds — Mayhoola For Investments and Al Mirqab Capital — remain in the race, another source close to the process said.

Gareth Penny declined to comment. QIA, Mayhoola and Al Mirqab did not immediately respond to requests for comment during a national holiday.

Separately, the government of Botswana, which owns 15% of De Beers and supplies 70% of the company’s annual rough diamond production, said it is considering increasing its stake as part of the divestment process.

Though Anglo has a $4.9bn (R87.09bn) book value for De Beers, and UBS analysts expect the mining giant to net $4bn (R71.09bn) to $5bn (R88.07bn) from its exit, the consensus value for the business is about $3bn (R53.32bn), according to consensus provider Visible Alpha, due to a slump in the diamond market.

Prices have fallen about 35% from early 2022 highs due to changing consumer preferences and the rise of lab-grown gems, according to the Zimnisky Global Rough Diamond Price Index.

Reuters

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