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UPDATE 3-Glencore nearly doubles Optimum stake to 24 pct
September 6, 2011 / 7:56 AM / 6 years ago

UPDATE 3-Glencore nearly doubles Optimum stake to 24 pct

* Indian, Chinese firms, including Tata, also circling OCH

* Glencore has or has commitments for over 49 pct -sources

* Takeover would be Glencore’s biggest since listing

* Glencore jumps in at a time of political uncertainty (Adds Tata comment, Optimum closing share price)

By Jacqueline Cowhig and Ed Stoddard

LONDON/JOHANNESBURG, Sept 6 (Reuters) - Glencore , the world’s largest commodity trader, has almost doubled its stake in takeover target Optimum Coal Holdings to 23.9 percent, and sources said shareholders had promised to sell much more.

Glencore said on Tuesday it had bought 24.6 million shares in the South African coal miner at an average price of 37.98 rand on Monday.

Sources close to the deal said Glencore had also secured commitments from OCH shareholders to sell enough shares to take its holding to at least 49 percent.

Glencore’s offer to shareholders made some time in early July bound them to negotiate exclusively with Glencore for 60 days.

Glencore has been the most determined bidder, but other foreign firms have also shown a keen interest, sources close to the deal said.

India’s Tata Power had a serious look at OCH’s data room and has approached some of the minority shareholders with a view to buying a stake but may have dropped out of the running now, the sources said.

Tata power declined to comment specifically on Optimum, but said it had “an ongoing process to evaluate various opportunities to acquire resources including coal mines globally”.

At least one other privately owned Indian trader and a Chinese coal importer have also approached shareholders, the sources said.

Those shareholders who have not yet decided whether or to whom to sell are still being doggedly pursued by interested parties because the 60-day exclusivity agreement has just expired or is about to expire.

OCH’s shares ended down 2.6 percent at 37 rand, underperforming a 1.2 percent fall on Johannesburg’s wider all-share index .

The price Glencore paid on Monday was considerably more than the 34 rand per share that it and a company owned by its South African partner, politician-turned-tycoon Cyril Ramaphosa, had publicly offered in a deal valuing OCH at about $1.1 billion.

It is the Swiss-based trader’s largest takeover bid since its May stock market listing.

Glencore’s deep pockets and Ramaphosa’s influence would make for a formidable bid that could nullify opposition from unions or shareholders, some of whom may be reluctant to see the trader extend its reach in South Africa.

“It’s good to see someone from outside the country investing and backing South Africa. Glencore has for years provided a service to the juniors to allow a lot of coal to leave the country, to have it marketed, which otherwise would not have done so,” said a source at one of South Africa’s biggest coal miners.

The drive into South African mining also comes amid investor uncertainty about regulatory requirements such as black ownership targets, talk of nationalisation, steeply rising costs and labour militancy.

Chinese metals giant Jinchuan is in the process of taking over South Africa-listed miner Metorex , but it will be delisted in Johannesburg, and its copper and cobalt operations are elsewhere in Africa, so it has no exposure to domestic political risks.

But South African coal assets still look promising, given Asian and local power utility demand and the country’s location, with shipping access to the Indian and Atlantic Oceans. ($1 = 7.120 South African Rand) (Additional reporting by Ketan Bondre; Editing by Will Waterman)

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