Anglo American is exploring an initial public offering of its diamond business De Beers, two people familiar with the matter told Reuters on Tuesday, with one flagging London as the preferred venue.

The potential listing was the default option, the second person said, although the process is at an early stage. Both were speaking on condition of anonymity because the plans are private.

The London-listed miner set out on Tuesday its plans for a potential break-up via a demerger or sale of some of its assets, as it fights off a $43 billion takeover bid from BHP Group.

CEO Duncan Wanblad said the plan was to spin out or sell De Beers, without giving further details. Anglo holds 85 percent of De Beers, while the government of Botswana, the location of its biggest mines, owns the remainder.

Anglo declined to comment. Botswana’s government did not immediately respond to a request for comment.

“De Beers is a great set of assets and it’s a great business,” Wanblad told a media call earlier on Tuesday. “It is sitting at the bottom of a cycle. That cycle is more macroeconomic than fundamental.”

De Beers could fetch a valuation of 8 to 10 times core earnings, one of the people said.

Although he supports the growth strategy Anglo has developed for De Beers, the world’s largest diamond producer by value, Wanblad said Anglo believes it is “better executed by different owners and in a different structure” from today’s.

Like other luxury goods, diamonds have suffered a fall in global demand. De Beers, which both mines diamonds and produces synthetic gems via its Lightbox Jewellery unit, has been limiting supply and offering flexibility to contracted customers.

In February, Anglo announced a $1.6 billion impairment charge on the division. It acquired De Beers in 2011, buying the Oppenheimer family’s 40 percent stake for $5.1 billion.

A London listing would be a boost for the UK stock market, which as of last month had attracted only 2 percent of European IPO volumes this year, according to Dealogic Data, reflecting a sluggish economy and a perception the market is undervalued.

By Anousha Sakoui and Clara Denina; Editing by Veronica Brown, Catherine Evans and Jan Harvey

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