initial public offerings (IPOs) trading on American exchanges

Sunday, February 27, 2011

Glencore Said to Plan Talks With IPO Investors

(Bloomberg) -- Glencore International AG, the largest commodities trader, is set to start talks with potential investors for an initial public offering and will begin briefing analysts today, said people with knowledge of the plan.

Discussions with funds including China Investment Corp. and Qatar Investment Authority are about to begin, said one of the people, who declined to be identified because the talks are confidential. Mining analysts in London will attend a two-day briefing in the city starting today, with some also visiting assets owned by Glencore later in the week, two people said.

Glencore is studying a $10 billion IPO in London and Hong Kong by the third quarter, to be handled by Citigroup Inc., Credit Suisse Group AG and Morgan Stanley, two people said last month. Liberum Capital Ltd. valued the Baar, Switzerland-based company at $47 billion to $51 billion in a July report.

Chief Executive Officer Ivan Glasenberg, Chief Financial Officer Steven Kalmin and other senior management will brief the group of analysts, two people said. It’s unclear whether the banks attending have been assured of a role in any possible IPO, they said.

Simon Buerk, a spokesman for Glencore, declined to comment when contacted by phone yesterday. Calls to China Investment Corp.’s Beijing head office outside business hours weren’t answered. Calls to Qatar Investment Authority also went unanswered.

Additional Banks

The London-based Sunday Times reported yesterday that Glencore had opened talks with China Investment Corp. and Qatar Investment Authority. The company has hired five additional banks to prepare it for an IPO, which may include Goldman Sachs Group Inc. and Merrill Lynch, a Bank of America Corp. unit, the Sunday Telegraph reported. Analysts from eight banks will attend a presentation in London this week, the newspaper said.

Glencore sold convertible bonds in December 2009 for the first time, raising $2.2 billion and attracting investors including BlackRock Inc., Government of Singapore Investment Corp., Greenwich, Connecticut-based private equity investor First Reserve Corp., and Zijin Mining Group Co.

Glencore employs 2,000 people in its trading units and more than 50,000 at its industrial operations at 15 plants in 13 countries, according to a company fact sheet on its website.

The trader also owns 34 percent of Swiss miner Xstrata Plc and controls mines and metals plants on five continents. The Xstrata investment is worth $22 billion at the current share price.

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