A CLUTCH of senior City figures have been approached to become the chairman of Anglo American, the mining group that last week received a £40 billion merger approach from rival Xstrata.

Jim Leng, who recently stepped down as chairman of Rio Tinto after a board row, has been put forward as a potential candidate to succeed Sir Mark Moody-Stuart, who has already announced his intention to step back.

Sir John Parker, chairman of National Grid, has also been sounded out. So too have Niall FitzGerald, deputy chairman of Thomson Reuters, and Paul Anderson, a board director at BHP Billiton, who was one of two people shortlisted for the BP chairmanship.

Anglo has stepped up the search for a new chairman as it looks to build its defences against Xstrata’s unwelcome approach and demonstrate its case for remaining independent. The shareholders have demanded that the miner’s conservative leadership is strengthened and that the company increases shareholder value.

Among the new chairman’s first decisions will be whether to replace chief executive Cynthia Carroll. Only the sixth chief executive in the group’s history, she has been criticised by some investors for poor leadership and overpaying for acquisitions.

By contrast, Xstrata has grown quickly in the past decade through a string of blockbuster deals. The Anglo board is already looking at ways of fast-tracking returns to investors and reducing debt. It is looking to raise $2.5 billion (£1.5 billion) from the sale of a 50% stake in its Brazilian iron-ore operations as part of its defence against Xstrata’s approach.

Carroll is under pressure to come up with a strong set of proposals to fend off Anglo’s rival – and to win over restive board members and shareholders.

The sale of a stake in the Brazilian iron-ore assets could prove a popular move. Anglo bought them at the height of the commodities boom last year, only to see ore prices tumble as demand for steel slumped. China’s state-backed companies Chinalco and Min-metals are potential buyers.

Anglo is exploring other disposals as part of its defence against Xstrata, which made an unsolicited, all-share merger proposal 10 days ago.

Combining the companies would create a global mining group with a turnover of more than $40 billion. Anglo’s board flatly rejected last week’s approach, saying there was little advantage and that “irrespective of this lack of strategic merit, the terms were totally unacceptable”.

Xstrata, headquartered in Switzerland and listed in London, is understood to have told the South African authorities it will retain a listing there if the merger goes ahead. Anglo has many of its most valuable mines in South Africa and has a dual listing there and in Britain. It moved its headquarters from Johannesburg to London a decade ago.

Earlier this week, Susan Shabangu, South Africa’s mining minister, described the proposed deal as “uncompetitive and unhealthy” for the country, where the government says 25,000 jobs have been lost as a result of a 40% fall in commodity prices.

Xstrata has said the combined companies would yield synergies of $1 billion. Its advisers believe the figure could be at least three times higher.

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