Glencore seen choosing chairman as banks vie for IPO
Glencore is reported to have lined up one-time BP
Chase has agreed in principle but had not been formally appointed, while the other final candidate, former trade minister Lord Davies, had turned the offer down, the UK's Sunday Times, citing sources close to the situation, said.
Chase, who has also been deputy chair of supermarket group Tesco , spent almost 40 years at BP, where he was instrumental in the creation of Russian venture TNK-BP
Glencore
However, the Glencore role may not last long, the Times said, as Chief Executive Ivan Glasenberg is keen to merge with Swiss miner Xstrata
If Chase is appointed to chair Glencore, he could be working with former BP chief executive Tony Hayward who has been lined up as senior independent director. Sources close to Hayward told Reuters last week that Hayward, who was ousted during the Gulf of Mexico oil spill, had also been approached by Glencore.
Glencore's ties to Xstrata not only present problems in terms of appointing a new chairman, they are also causing headaches for advisers wanting a slice of the action.
Links with Xstrata may also exclude Deutsche Bank
A standoff between Glasenberg and Davis -- who has called on JPMorgan's Ian Hannam and Brett Olsher, formerly of Deutsche Bank, for a string of deals -- could force banks to take sides.
But while people familiar with the matter say Glasenberg has weighed a merger with Xstrata as an alternative route to the public markets, the idea has been resisted by Davis and Xstrata investors, who wanted a public valuation of Glencore first.
The listing may also test the much-vaunted client conflicts policy of Goldman Sachs
Conflicts of interest are particularly thorny in mining, which is dominated by a handful of huge, acquisitive companies, and has played host to a string of acrimonious bid battles such as BHP Billiton's tilt at Rio and Xstrata's move on Anglo.
Long-time advisers Citigroup
Glencore
A listing is not yet a certainty. Its size, timing, and value are all open questions. But the stakes are indisputably high: a $10 billion listing, for example, could pay $300 to $400 million in fees, Freeman & Co reckons.
It's a huge bonanza at a time when there's virtually nothing going on, said Philip Keevil, a partner at Compass Advisers. Keevil, a former head of European mergers and acquisitions (M&A) at Citigroup, has advised miners including Anglo American and Rio Tinto
Xstrata should be concerned not to have its core advisers put offside: You don't want to be in a situation where there's nobody able to advise you, because the likelihood is Xstrata will need independent advice down the road, said Keevil.
Global co-ordinators and bookrunners are in a conflict-rich environment, reading board minutes, talking to management, and so on. It would be difficult for one of the senior banks on the Glencore float to turn round and fairly represent Xstrata in any future transaction involving its parent.
Deutsche Bank and JPMorgan are Xstrata's longstanding corporate brokers and have counseled Davis on almost every major deal or fund-raising.
Each has received nearly $240 million since 2000 from Xstrata for advice on bond and share issues, loans, and takeovers, Thomson Reuters data and estimates show, or 33 percent each of total fees. The next bank down claimed 5.7 percent of the fee pool.
Deutsche, JPMorgan, Goldman Sachs and Xstrata declined to comment.
(Additional reporting by Rosalba O'Brien and Julie Crust; Editing by Alexander Smith and Jon Loades-Carter)
© Copyright Thomson Reuters 2024. All rights reserved.