Commodity trader Glencore aims for May IPO: source

LONDON Wed Mar 9, 2011 11:50am EST

The Glencore logo is seen on a sign in front of Swiss commodities trader Glencore building in Baar near Zurich January 5, 2010. REUTERS/Christian Hartmann/Files

The Glencore logo is seen on a sign in front of Swiss commodities trader Glencore building in Baar near Zurich January 5, 2010.

Credit: Reuters/Christian Hartmann/Files

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LONDON (Reuters) - Glencore GLEN.UL, the world's largest commodity trader, is aiming for an initial public offering (IPO) in May, a source close to the situation said.

There has been speculation that Glencore could try to squeeze out an IPO before Easter, which falls toward the end of April, although sources familiar with the situation have said no decision on whether to go ahead has yet been taken.

Glencore intends to have a primary listing in London and a secondary listing in Hong Kong, the source told Reuters.

"All the research reports have to be (completed) by April 1," the source said on Wednesday, adding that this deadline had been set by Glencore at a briefing to analysts last week.

A select group of mining analysts were briefed extensively by Glencore on all aspects of its business, giving them the details they needed to come up with a valuation for the privately-held partnership.

A condition of attendance at such briefings usually involves a commitment to publish research reports within a set period to fit in with the IPO timetable.

After such briefings, sell-side analysts publish research notes giving valuations of a company wishing to float. These publications are a key step toward a listing and a prelude to wider pre-IPO investor briefings and roadshows.

Glencore declined to comment on its plans.

A stock market listing this year could value it at $60 billion.

But while an IPO is an attractive option given market valuations, it is not the only avenue open to Glencore, which has also looked at merging with mining group Xstrata XTA.L.

Like investment bank Goldman Sachs, which floated in 1999, Glencore wants the permanent capital that comes with a listing, freeing it from the uncertainty of a private partnership, where payouts to departing partners shrink the capital base.

An IPO would boost its ability to make a larger acquisition, possibly opening the door to a bid for Xstrata, in which Glencore already holds around a third. Such a move has so far been resisted by the miner's chief executive Mick Davis.

Although Glencore has told investors that no decision has been taken over a share offer and that it does not want to commit to a timeframe for making a decision, expectations that it will go down this route have risen following the analyst briefings.

A downside of pulling the trigger for Glencore Chief Executive Ivan Glasenberg is that he would lose his closely guarded privacy and be open to public scrutiny.

But an IPO would also give partners in Glencore hefty pay-outs on a scale not seen since the Goldman flotation.

(Additional reporting by Julie Crust; Writing by Alexander Smith; Editing by David Cowell)

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