Bloomberg News

Glencore Said to Study Starting IPO Next Week; Investments Jump

April 04, 2011

Glencore Said to Study Starting IPO Next Week

The headquarters of Glencore International AG stand in Baar. Photographer: Gianluca Colla/Bloomberg

Glencore International AG (GLEN), the world’s largest commodities trader, is considering filing its intention to sell shares in London as early as next week, according to two people with knowledge of the sale.

The stock may begin trading in London and Hong Kong at the same time in May, said the people, who declined to be identified because the information is confidential. Glencore won approval from the Hong Kong exchange on April 1 to sell shares in the city, two people said last week.

The value of Glencore’s 10 largest holdings, including a 34 percent stake in Xstrata Plc, climbed to $32 billion as of 12:50 p.m. in London, the highest level since April 2010. The value dropped as low as $28 billion last month after Japan’s worst earthquake on record prompted a global stocks selloff.

Simon Buerk, a spokesman for Baar, Switzerland-based Glencore, today declined to comment on the IPO timing.

Commodities rose to a two-year high today, while more than $20 billion of takeovers spurred gains in stocks. The Standard & Poor’s GSCI (SPGSCI) spot index of 24 raw materials increased 0.5 percent at 12:51 p.m. in London, advancing 9.9 percent from its lowest intraday point last month. The MSCI World Index added 0.3 percent, extending gains since its March low to 7.5 percent.

$10 Billion Sale

An initial public offering by Glencore, which changed its name from Marc Rich & Co. after management bought out former fugitive U.S. financier Marc Rich in 1994, would end more than three decades of being a closely held partnership. The sale may raise a total of $10 billion in London and Hong Kong, people with knowledge of the matter said Jan. 26.

After its Xstrata holding, Glencore’s next largest stake is an 8.8 percent interest in United Co. Rusal (486), the world’s largest aluminum producer. Glencore also owns 74 percent of Katanga Mining Ltd. (KAT) and 71 percent of Australian nickel producer Minara Resources Ltd. It holds stakes in Century Aluminum Co. and Nyrstar NV, the biggest zinc producer.

Glencore’s 10 largest mining-company investments are listed in its published holdings as of Dec. 31, according to its annual report to bondholders obtained by Bloomberg News.

Citigroup Inc. (C:US), Credit Suisse Group AG (CSGN) and Morgan Stanley (MS:US) will manage Glencore’s IPO as global coordinators, while Bank of America Corp. (BAC:US), Barclays Plc (BARC), BNP Paribas SA (BNP), Societe Generale SA (GLE) and UBS AG (UBSN) may be named bookrunners, two people said March 22.

To contact the reporter on this story: Zijing Wu in London at Zwu17@bloomberg.net.

To contact the editors responsible for this story: Jeff St.Onge at jstonge@bloomberg.net; Amanda Jordan at ajordan11@bloomberg.net.


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