Glencore IPO aims for the stars as Qatar eyes stake
Glencore
If it goes ahead, an initial public offering (IPO) of privately held Glencore could value the company at as much as $60 billion according to Liberum Capital estimates, making it one of Europe's biggest listings ever.
While no final decision has been taken, an IPO remains one of the options, a source familiar with the situation said. The process has been dubbed Project Galaxy, sources said.
Qatar, one of the sovereign wealth funds flagged as a possible cornerstone shareholder, is considering investing in Glencore, the country's prime minister said on Monday.
We are studying the matter at the moment. I believe we will have a meeting here in Doha in the next two days, the Gulf state's Prime Minister Sheikh Hamad bin Jassim bin Jabr al-Thani said on the sidelines of a conference in Doha.
A public listing would allow Glencore, a partnership, to keep growing even if its partners wish to leave.
It would also bolster the Swiss-based trader's balance sheet, reassuring credit-rating firms, and allow it to make major acquisitions using shares as payment.
Glencore's senior management team, led by 54-year-old Chief Executive Ivan Glasenberg, is presenting to sell-side analysts in London over a couple of days to improve their understanding of the company and its operations, the source added.
Glencore will also be taking analysts on visits to sites in places including Kazakhstan and Africa, a second source added.
It is also preparing the IPO ground by seeking to appoint non-executive board members. Tony Hayward, the former BP Plc
Glencore could float 20 percent or more of its stock, possibly split between London and Hong Kong, raising up to $16 billion. If it reached that, a Glencore deal would be around the same size as Europe's largest IPO to date, the 1999 flotation of Italy's Enel SpA
A deal of that size would represent a huge payday for investment banks -- perhaps $300 million to $400 million -- and an even bigger bonanza for the 500 or so partners who own the firm. Their shares could be worth up to $120 million on average.
Glencore, whose one-third holding in mining group Xstrata
EASTER FLOAT?
Speculation that an IPO could be done before Easter, which falls at the end of April, was premature and it could equally come after that, the second source said.
Something like this you can't really rush through and jam it through, it is a priority not to do that, the source said.
Although Glencore could be listed in both London and Hong Kong, London would be very much be the primary listing.
The first briefings in such situations are normally with the analysts working for the banks which have been hired to advise a company on its options. This can include the so-called global co-ordinators of a possible IPO and a wider syndicate.
Following such presentations, investment banking analysts normally have a month to produce so-called paving research that is used to help explain the company to potential investors but is not usually published to a wider audience.
Once a decision to take this step and produce such research has been taken, bankers say there are usually a couple of weeks to decide whether or not to proceed with an IPO.
If Glencore and its advisers do not press the button before Easter, they would likely have to wait until early May as the UK will have an extended holiday period during late April as a result of the royal wedding on April 29.
Citigroup, Morgan Stanley and Credit Suisse have been appointed to lead Glencore's possible flotation, with other investment banks scrambling to get a slice of what they hope will be lucrative fees if the IPO goes ahead.
Several bankers in London said they did not think that the final group of banks had yet been selected by Glencore.
Some of last year's high-profile deals involved syndicates of up to 10 banks, prompting accusations that the companies involved were trying to stifle any negative research. (Additional reporting by Julie Crust and Quentin Webb in London; Writing by Alexander Smith; Editing by David Holmes and Hans Peters)
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