Glencore's US$11b IPO heats up
Source: Agencies |
May 13, 2011, Friday
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Print Edition
Print Edition
GLENCORE International Plc received enough demand from investors for its US$11 billion initial public offering to sell the shares more than twice over, said three people close to the matter.
Highbridge Capital Management LLC, a hedge fund owned by JPMorgan Chase & Co, proposed a US$500 million investment, said one of the people, who declined to be identified because the information isn't yet public. The last orders for the offer are due on Wednesday, with final pricing to be disclosed the following day, according to a term sheet for the sale.
Demand for stock in the world's largest commodities trader has weathered a rout in raw materials prices last week, the biggest in two years, which wiped out US$99 billion of market value. The IPO, the largest since General Motors Co's in November, will give Glencore a value of US$61 billion if priced at the midpoint of its offer range, the firm said last week.
Glencore is offering as many as 1.25 billion shares. London shares are priced at 480 pence (US$7.84) to 580 pence each, a prospectus published last week shows. The company yesterday priced stock to be listed in Hong Kong, representing 2.5 percent of the total offer, at HK$61.24 (US$7.88) to HK$79.18.
Citigroup Inc, Credit Suisse Group AG and Morgan Stanley are among banks managing the IPO. Current holders may sell additional shares for tax purposes, while an overallotment option brings the total offer to US$11 billion.
Demand was spurred by interest from so-called cornerstone investors, including Abu Dhabi's sovereign wealth fund and BlackRock Inc, which agreed to buy 31 percent of the shares in total, three people with knowledge of matter said last week, declining to be identified because the information is private.
Glencore's inclusion in the UK's FTSE-100 Index of stocks also fueled demand, Paul Galloway, an analyst at Sanford C. Bernstein Ltd, wrote in a report.
Highbridge Capital Management LLC, a hedge fund owned by JPMorgan Chase & Co, proposed a US$500 million investment, said one of the people, who declined to be identified because the information isn't yet public. The last orders for the offer are due on Wednesday, with final pricing to be disclosed the following day, according to a term sheet for the sale.
Demand for stock in the world's largest commodities trader has weathered a rout in raw materials prices last week, the biggest in two years, which wiped out US$99 billion of market value. The IPO, the largest since General Motors Co's in November, will give Glencore a value of US$61 billion if priced at the midpoint of its offer range, the firm said last week.
Glencore is offering as many as 1.25 billion shares. London shares are priced at 480 pence (US$7.84) to 580 pence each, a prospectus published last week shows. The company yesterday priced stock to be listed in Hong Kong, representing 2.5 percent of the total offer, at HK$61.24 (US$7.88) to HK$79.18.
Citigroup Inc, Credit Suisse Group AG and Morgan Stanley are among banks managing the IPO. Current holders may sell additional shares for tax purposes, while an overallotment option brings the total offer to US$11 billion.
Demand was spurred by interest from so-called cornerstone investors, including Abu Dhabi's sovereign wealth fund and BlackRock Inc, which agreed to buy 31 percent of the shares in total, three people with knowledge of matter said last week, declining to be identified because the information is private.
Glencore's inclusion in the UK's FTSE-100 Index of stocks also fueled demand, Paul Galloway, an analyst at Sanford C. Bernstein Ltd, wrote in a report.
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