ANGLO AMERICAN, led by chief executuve Cynthia Carroll, snubbed rival miner Xstrata’s takeover approach last night, calling its rival’s terms “totally unacceptable”.<br /><br />Anglo said Xstrata’s £40bn plus merger proposal was “unattractive” and would hurt its interests in the platinum, iron ore and diamond markets. Xstrata has strong coal and copper interests. <br /><br />Anglo added that its current business strategy of cutbacks on investment would make “substantial savings”.<br /><br />Xstrata, led by chief executive Mick Davis, expressed disappointment at Anglo’s “rapid rejection” of its all-share “merger of equals”.<br /><br />Xstrata claimed its proposal to merge “two world-class companies” was “highly compelling”.<br /><br />It was last night unclear whether Xstrata would sweeten the terms of its approach for Anglo, and analysts remained divided on whether a deal would be possible following the rejection.<br /><br />Industry observers suggest a merger would make sense because of the vast cost savings that could be made.<br /><br />“Anglo is just lifting a skirt and showing an ankle,” Seven Investment Management’s Justin Urquhart-Stewart said last night. “By rebuffing Xstrata, Anglo will now look far more attractive. This is the mining equivalent of ‘ding dong’,” he added.<br /><br />Others doubt Xstrata is strong enough to woo Anglo, as it has already raised £4.1bn through a rights issue and has a substantial debt pile.<br /><br />The proposed marriage between the two titans comes after a joint venture between mining giants Rio Tinto and BHP Billiton. <br /><br />Miners all around the world are seeking to cost-cut through consolidation, as they battle against debt and surplus capacity in the economic downturn.<br /><br />Anglo’s chief executive Cynthia Carroll is under fire from shareholders who say she has made unnecessary expensive acquisitions.<br /><br />Xstrata boss Mick Davis has a fierce reputation as a deal maker, and some analysts have indicated he would be good for Anglo.<br /><br />It is understood that Harbor International Fund, an investor in both Anglo and Xstrata, supports Davis in his desire for Anglo. A merger would be “a good idea,” it said.<br /><br />It is not the first time Xstrata and Anglo have talked: in late 2007 Davis sounded out Anglo as a potential buyer for Xstrata, but a deal was never cut.