Glencore set to unveil flotation prospectus

 

Commodities giant Glencore is expected to publish the prospectus document for a £30bn float on the London stock market today.

Copper stream

Commodities giant: Listing of Glencore could be biggest ever on the London Stock Exchange

The share offer is likely to be valued at the lower end of expectations but is still expected to make dollar billionaires of chief executive Ivan Glasenberg and three top trader colleagues.

Banking heir and financier Nat Rothschild is also set to make a multi-million pound profit thanks to his purchase of £25m worth of bonds that convert into shares in the float.

Rothschild made the investment as part of a £1.4bn debt issue launched by the Swiss firm in December 2009.

In its announcement of its intention to float, Glencore said it is planning to offer between 15% and 20% of its post-float share capital at between £5.5bn and £6.7bn.

The listing, which could be the biggest ever on the London market, will be backed by cornerstone investors including Swiss private banks, Middle Eastern sovereign investment funds and hedge fund managers.

Abu Dhabi's sovereign wealth fund is poised to become the company's biggest shareholder after its employees.

Cornerstone investors are likely to buy around 30% of the shares sold and will commit to hold them for at least six months.

The company will also have a listing on the Hong Kong market. Several existing holders of Glencore's convertible bonds are also likely to serve as cornerstone investors, including US fund manager BlackRock, Government of Singapore Investment Corporation and China's Zijin Mining. The emirate of Qatar recently said it is considering backing the company.

Glencore will publish a price range that could place a minimum value on the company of less than £30bn including new funds, at the lower end of what the City had been expecting.

The launch on the London Stock Exchange will crystallise millions of pounds for its 485 top traders, with some in line for more than £100m – more than the amounts received by many investment bankers.

The company has come under fire from corporate governance campaigners over the appointment of chairman Simon Murray, who last month made controversial comments about women in the boardroom.

It has also faced questions about the independence of some board members, including ex-BP boss Tony Hayward, a mutual friend of Glasenberg and Rothschild.

Glencore wants to merge with London-listed miner Xstrata but has run into obstacles over pricing. Some observers fear its float may signal the top of the commodities cycle