Posts tagged 'Glencore'

Cultural learnings of stock market valuation for make benefit glorious commodity trader Glencore

When people start worrying about commodity traders in bear markets, the commodity traders themselves tend to reassure the market with comments like: “Ha! This clearly demonstrates you don’t understand our business at all. Lower commodity prices are GRRREAT for us. They liberate our balance sheet on a working capital basis and allow us to focus on our real value add, which is… spread trading.”

Though, if you’re Glencore, you tweak the comment so it goes something like:

“Prices are still not making sense where they are … it’s the funds driving it where it is today, not the actual demand,” Mr Glasenberg argued. “They believe demand for commodities is going to fall and continue to fall and that’s their view. Our view is what we see on the physical movement of commodities and it’s not too bad. We see the flows are still pretty strong.”

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GlenTinto – fact or fiction

You’ve seen the story.

Now here’s some reaction. Read more

Leaving Las Bambas

We take an unseemly level of interest in Peruvian copper mine projects on FT Alphaville. It’s a side-effect of writing for Lex.

But then so too has a consortium of highly strategic Chinese resources investors (Minmetals, Guoxin International Investment, Citic)…

They’ve bought Glencore Xstrata’s stake in Las Bambas, a very big Peruvian copper asset, for $5.8bn cash, according to a release from Baar, Switzerland on Sunday: Read more

Xstrata 2.0 (or what Mick did next)

What now for Xstrata CEO Mick ‘The Miner’ Davis?

Bloomberg thinks it has the answerRead more

Record highs and commodity writedowns

On the day the Dow is expected to open at a record high, the hottest M&A story of the year — Glencore and Xstrata — brings us the following.

First the collective news (via the FT): Read more

Has Ivan started drinking what Mick was drinking?

We are talking here about Glenstrata, of course, going ex-Mick Davis and cum-Ivan Glasenberg as soon as the last bits of competition authority clearance arrive…

Ivan has already sent industry tongues a-wag with some off-the-grid comments at a BMO Capital Markets conference in Florida, as reported by Reuters:

What we’ve got to do, when the markets do get stronger, no need to keep building a new asset and let’s keep the market tight for a while…

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Hey, spendy miners, operate Glencore style

Alternate working title: Opec-cartel style

We’ve already heard from Oleg Deripaska on the matter. And we’ve started to see the consequences hit Rio Tinto and BHP Billiton. But the latest “we must rein in supply” Opec-cartel style talk, actually emanates from Glencore CEO Ivan Glasenberg.

Bloomberg has the story ( hat tip to Reuters’ John Kemp) and it offers few cracking paragraphs to say the least: Read more

A sharp protest vote at Xstrata (but the deal goes on)

Maybe this was inevitable after the Qataris said they would approve Xstrata’s merger with Glenstrata, but would abstain on the retention bonuses. But the raw numbers of shareholders here saying payments to management were excessive suggest a very aggressive mood amongst institutions. Remember, this is a revised incentive scheme, where shareholders were supposed to have been listened to…

The result from Xstrata’s shareholder meeting on Tuesday… Read more

Glencore Xstrata is born, almost

Subject to the vote of Xstrata shareholders later on Tuesday, of course. And one or two regulatory hurdles remain. But while we wait for the XTA vote, here are the voting results of the Glencore shareholder’s meeting… Read more

A Qatari sub-plot?*

A few nervous bid arbitrageurs have their eyes on the Qataris right now — wondering, expectantly, whether the Gulf state’s sovereign wealth fund will now support the takeover merger of equals between Glencore and Xstrata.

The Glenstrata share ratio has been hiked and the Qataris, it is assumed, don’t really care about the size of retention bonuses at Xstrata. But a public endorsement of the deal was noticeably lacking on Monday… Read more

The Glenstrata fudge

Here’s the key bit from Monday’s confirmation that Xstrata’s independent directors are once again recommending merger terms from Glencore…

1.   To approve the New Scheme subject to the resolution to approve the Revised Management Incentive Arrangements to be put to the Further Xstrata General Meeting being passed.  The Independent Xstrata Non-Executive Directors intend to recommend unanimously that eligible Xstrata Shareholders vote in favour of only this resolution at the New Court Meeting; and Read more

Glenstrata extends

So much for D-Day in the unending saga of the Glencore-Xstrata tie-up.

Hot off the RNS feed on Friday: Read more

Outing the aluminium squeeze, Deripaska style

When the chief executive of UC Rusal, Oleg Deripaska, takes to the pages of the FT to air his frustrations about his industry, you’ve got to sit up and listen. Especially when he concludes that output caps are needed to overcome the problems.

Rusal, of course, is one of the world’s top aluminium producers and Deripaska, it turns out, wants output caps because he is worried about the  strange anomalies which are gripping his market. Read more

Glasenberg: ‘You can stay on as CEO for a bit’

Final terms from Glencore in its hostile bid for Xstrata include this weird proposal:

In order to provide clarity on the issue of CEO succession, Mick Davis will become the Chief Executive Officer and executive director of the Combined Group on the Merger becoming effective but to step down within 6 months with Ivan Glasenberg becoming Chief Executive Officer of the Combined Group at that time. Read more

Sticking it to Glasenberg, and standing by Mick

Fierce statement out of Xstrata on Friday afternoon…

The Independent Directors of Xstrata plc have today written to Glencore International plc to request clarification of the outline proposal (the “Proposal”) provided to the Xstrata Board immediately prior to the Xstrata Court Meeting and New Xstrata General Meeting today in Switzerland. Read more

Xstrata: proposal received from Glencore at 3.05 ratio per share

From the RNS:

The Board of Xstrata plc (“Xstrata”) has received a proposal from Glencore International plc (“Glencore”) to amend the terms of the merger of Glencore and Xstrata. Read more

Tony Blair brokers Glenstrata deal

Yup. Bouncing back from the Archbishop Tutu affair, the former British Prime Minister is understood to be acting as a last minute peacemaker between Glencore’s Ivan Glasenberg and Qatar Holding, the SWF that is threatening to quash the $70bn merger of Glencore and Xstrata.

That’s the “development” referred to earlier by Glencore as it adjourned its shareholder meeting on Friday in Switzerland. Read more

What about some info Glenstrata? – updated

At around 8.20am this morning, there was some news from the Theatre-Casino in Zug.

Xstrata had adjourned EGM for the $80bn merger following a “development”. Read more

Un-Glencoring Xstrata

How do you price in the unwinding of a fantasy takeover bid?

That’s the challenge in the London mining sector as the promise of Glencore merging with its long-term associate Xstrata fades. Read more

Xstrata, un-pricing Glencore…

That’s Xstrata, down 6 per cent at 910p at pixel. It was sitting at the top of the Footsie “losers” board towards the end of Wednesday’s session, just above would-be merger partner Glencore International, which had itself fallen 4.5 per cent to 350p. (Both prices subsequently rallied as the market closed.) Read more

Glenstrata, the scheme doc

Click image for the full, 136-page doc.

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Greece: stuck between Iran and Glencore

You know things are tricky when your energy options are Iran, Glencore or blackouts, and then the Iran option is removed.

We’ve known for while that Greece’s reliance on Iranian oil has put it in a difficult situation, at time when banks are pulling letters of credit and Iran sanctions bite. This was an early sign of creditors’ fear of drachma exposure. Read more

Glencore, an investigative report

Kudos to Foreign Policy for spending a year investigating Glencore.

Did you know, for example, that the name “Glencore” comes from: GLobal ENergy COmmodities and REsources? According to Foreign Policy, this was actually considered a secret (bizarrely enough). Read more

Glencore vs Panorama and John Sweeney

It’s hard being listed, huh?

In his first television interview, Glasenberg said that Glencore took corporate responsibility seriously, saying: “We care about the environment. We care about the local communities.” Read more

The Glenstrata glitch

Can it really be true that advisers to Glencore and Xstrata  did not envisage a referral to the competition authorities in Brussels when planning their $90bn $80bn merger?

Seems so… Read more

Glencore ’08 revisited

Credit rating feedback on Glencore’s recent deal-making spell is finally in. And there’s something of a small split between the two main agencies.

Moody’s, for example, changed the direction of its review of the ratings on Glencore International to direction “uncertain”, having previously had the ratings on review for upgrade. The issue they see is with debt and liquidity: Read more

Re-securitising commodities financing

French banks are stepping back into funding commodities trades, after pulling back on lending last year due to a dollar liquidity shortage.

But this time, it’s securitised. As the FT reportsRead more

‘orrible merger (continued)

The concept of Ivan Glasenberg on a charm offensive is hard to grasp. Charm is not generally considered one of the key characteristics needed to be a top trader, but he’s going to need all that he can find to push through the shotgun merger of Glencore, the business he built, with Xstrata. There’s an awful lot riding on this $90bn deal, not least the estimated $100m payday for those poor, starving investment bankers who are desperately trying to get it done.

Alas for Ivan, the omens look poor, thanks to an extraordinary blunder designed to save a relatively trivial amount of tax. The preferred route, a scheme of arrangement, escapes the stamp duty that would be payable in a conventional takeover. In a scheme, approval by 75% of shareholders who vote clinches the deal, but Glencore itself cannot vote its 34% shareholding in Xstrata. It needs a maximum of 16.5% of the shares to be voted against for the deal to fail. In practice, something like 12% against would probably scupper it, since not every share will be voted. Read more

Glencore warns Xstrata shareholders

Glencore has warned resisting shareholders of Xstrata that it has walked away from deals before rather than fail to agree terms, days into its fight to convince them of its $36bn bid, Reuters reports. The trader warned institutional investors that they face “asymmetric” risks if the deal fails, in advance of a shareholder vote this summer. Xstrata shareholders who seek a higher offer have nonetheless dug in their heels, pointing to the impact on Glencore if takeover talks collapse. Glencore is currently offering 2.8 new shares per Xstrata share.

Glencore stands by Xstrata merger terms

Glencore has stuck to the terms of its proposed merger with Xstrata to create a $90bn natural resources champion, saying that the “natural combination” will realise immediate value to shareholders, the FT reports. The world’s largest commodities trading house has offered 2.8 of its own shares for each of the miner’s. Glencore issued its preliminary results on February 7, when both companies announced their merger deal, and the official release on Monday confirmed them. The commodities trader said that higher commodity prices lifted earnings at its mines and other production assets – including its 34 per cent stake in Xstrata. The trading house reported net income of $4.06bn before exceptional items, up 7 per cent from last year. But the profits were hurt by a large loss in cotton trading and low earnings in energy transactions in the second half of the year. Glencore said it lost more than $330m in cotton trading due to exceptional volatility in prices last year.