[miningmx.com] — GLENCORE is set to reveal how much CEO Ivan Glasenberg and other top managers stand to gain from one of Europe’s largest market debuts, when it publishes an indicative share price range.
Glencore, the world’s largest diversified commodity trader, last month announced plans to raise up to $12.1bn with a dual London-Hong Kong initial public offering (IPO) that will boost its firepower for deals at the height of a resources boom.
The long-awaited listing, which could be London’s largest to date, will push Glencore into the public eye and will turn publicity-shy executives including Glasenberg, a former coal trader, into paper billionaires.
Glencore’s price range, to be published on Wednesday in a prospectus for potential investors, is expected to come at the lower end of the wide $45bn to $73bn value implied by numbers released by Glencore in its intention-to-float document.
One person familiar with the matter said on Sunday that the range could place a minimum value on the company of less than $50bn including new funds – below a widely cited $60 billion valuation.
Analysts working on the deal have put “pre-new money” values on Glencore’s equity ranging from $52bn to $70bn, research from four houses including Bank of America/Merrill Lynch and Liberum Capital shows.
Founded in 1974 by trading sensation and later US fugitive Marc Rich, Glencore has until now held on to a fiercely prized tradition of public discretion, so investors will be poring over its prospectus for details on the company from its existing investors to its risks and details on its trading.
Glasenberg has never disclosed exactly how much of the firm he owns, though he is expected to be shown in the prospectus to be the top shareholder. It will also become clear whether former chairperson Willy Strothotte retains a major stake or not.
Reports have put Glasenberg’s stake as high as 15%, which could make him worth as much as $10.5bn in shares alone, if Glencore is valued at the top end of its own range. That would put Glasenberg around the same level as Britain’s third-richest man, the Duke of Westminster, according to the latest Sunday Times Rich List.
Glencore has said investors have been receptive to its offer. However a poll of potential institutional investors by Reuters last month showed corporate governance concerns after years of operating in the shadows could damage Glencore’s ability to achieve a top price.
The prospectus will also detail the cornerstone investors backing the offer, who could buy nearly 30% of the shares sold. Such investors, common in Asian listings, commit to taking large stakes and hold them for at least six months.
The person familiar with the matter said an Abu Dhabi vehicle, big hedge fund managers and Swiss private banks are set to serve as cornerstones, along with several existing investors in Glencore’s convertible bonds, including US fund manager BlackRock, Government of Singapore Investment Corp and China’s Zijin Mining.
The prospectus is also expected to include details of Glencore’s trading in the first three months of the year, along with details of gross fees paid to its advisers – the first indication of how much the commodities giant will pay its bankers in one of the biggest paydays for the sector this year. Conditional trading of shares is set to begin on May 19, according to a term sheet seen by Reuters last month.
