LONDON Aug 2 Minority shareholders in mining
group Kazakhmys, the largest single investor in ENRC
, voted on Friday in favour of a $4.6 billion buyout of
its troubled rival, paving the way for the group's founders to
take it private.
Almost 99 percent of Kazakhmys voting shareholders backed
the ENRC buyout bid - a deal which ends ENRC's almost six-year
London listing and a period marred by corruption investigations,
governance concerns and boardroom rows.
Kazakhmys, which has been trying for years to deal with its
problematic 26 percent stake in ENRC, said on Friday after a
brief shareholder meeting that 98.7 percent of voting
shareholders had approved the offer.
The bidders, ENRC's three founders and the Kazakh
government, already own almost 54 percent of ENRC, meaning
support from Kazakhmys now gives them control of more than
75-percent of ENRC, all but securing a deal.
Two of Kazakhmys's largest shareholders, former chairman
Vladimir Kim and Chief Executive Oleg Novachuk, had already
given their backing to their own board's approval of the ENRC
bid. But voting structures meant the deal needed to be supported
by the majority of Kazakhmys minority investors.
Independent shareholders also supported a waiver for Kim,
Novachuk and smaller shareholder Eduard Ogay, whose increased
holdings as a result of the share portion of the deal would
otherwise trigger a mandatory buyout of Kazakhmys.
The ENRC offer is in cash and the Kazakh government's shares
The bidders are offering $2.65 in cash plus 0.230 Kazakhmys
shares for every ENRC share held, or just over 237 pence a share
at Thursday's closing price. ENRC stock is trading around 223p.
Kazakhmys will get $887 million in cash and 77 million
shares as a result of the deal, boosting its finances at a time
when it is developing mines. The shares will be cancelled.
ENRC shares were flat after the vote, but Kazakhmys shares
dipped on the news and were down 1.6 percent by 1030 GMT.
Analysts at Morgan Stanley said they welcomed the expected
approval by Kazakhmys shareholders, and reiterated concerns
around efforts to keep down costs at the copper miner.
"We view favourably the approval of the ENRC offer and
believe that the sale proceeds will provide much-needed strength
to Kazakhmys' balance sheet and free a sizeable portion of the
company's capital employed, where management had limited
influence," they said.