LONDON May 19 Kazakhstan's government and the
trio of founders behind miner ENRC, seeking to take the
company private, have offered shares in rival Kazakhmys
as well as cash in an indicative proposal valuing the group at
just under $5 billion.
ENRC's billionaire co-founders, Alexander Machkevitch,
Alijan Ibragimov and Pathokh Chodiev, said last month they were
weighing up a buyout of the miner's minority investors and had
the support of the government, which is also a top shareholder.
ENRC's independent directors Friday said they had rejected a
tentative buyout offer and gave the bidding consortium until
June 3 to come up with an improved bid. But they did not detail
the value or structure of the bid.
In a weekend statement, however, they said the suitors had
proposed 175 pence per share in cash, and 0.231 of a Kazakhmys
share. At Friday's closing price of 338.4 pence for Kazakhmys,
that adds up to just over 253 pence per share - or 1.5 billion
pounds ($2.3 billion) for the roughly 46 percent of ENRC that
the trio and the government do not already hold.
That compares to ENRC's closing price on Friday of 272 pence
and its closing price on April 18, the day before the trio
declared a possible bid, of just under 230 pence.
Rival miner Kazakhmys is a major shareholder in ENRC, a
leftover from a failed takeover bid dating back to before ENRC's
listing. But, though it holds a total of just over a quarter of
ENRC's shares, it has not yet declared its hand.
Instead, the Kazakhmys shares in question will come from the
Kazakh government's almost 27 percent holding in the mining
company, according to sources with knowledge of the matter.
An offer at the proposed levels would mark a sharp drop for
shareholders who bought into ENRC at its listing or its mid-2008
peak. Since the start of last year alone, the shares have more
than halved in value.
The bidding consortium will use the coming two weeks to
hammer out its financing for the bid, expected to be supported
by Russian banks VTB and Sberbank, already ENRC's largest
lenders, alongside advisers Societe Generale.
ENRC, which mines a range of metals and has assets in
Kazakhstan, Democratic Republic of Congo and Brazil, declined to