- Glencore has a fantastic company culture and its management is uniquely aligned with minority shareholders.
- The company has a very diverse asset base and diversified revenue and income streams.
- Glencore has less China-centric risks compared to its main rivals.
- Shares seem undervalued compared to peers.
Glencore Will Slide Into Wall Street Banks' Commodities Space
The Glencore-Xstrata Merger: What It Means For Investors
Nov. 24, 2014, 6:28 PM
- Various hedge funds were told this month by a prominent London mining banker to prepare for an all-but-inevitable takeover of Rio Tinto (NYSE:RIO) by Glencore (OTCPK:GLCNF, OTCPK:GLNCY), Bloomberg reports.
- Former JPMorgan Chase dealmaker Ian Hannam, who now runs a boutique advisory firm, reportedly convened reps of more than 20 investors to share his views on the potential deal, perhaps intended in part to help position his firm to win a role in the transaction.
- Glencore said last month it had abandoned a bid for Rio after a July proposal worth ~$160B was rebuffed.
Nov. 20, 2014, 6:28 PM
- Nevsun Resouces (NYSEMKT:NSU) has emerged as a potential takeover target, and Financial Post's Peter Koven sees many positive factors to explain the interest and one big negative: Eritrea.
- NSU’s Bisha mine is extremely rich, with high-grade copper output that will transition into high-grade zinc output in coming years when many analysts expect shortages in the zinc market.
- But the downside is that Bisha is in Eritrea, which is ruled by one of the world’s most repressive governments and has caused major problems for the company.
- If a contested takeover battle is going to happen, analysts say offers would have to come from companies - perhaps Glencore (OTCPK:GLCNF, OTCPK:GLNCY) or Lundin Mining (OTCPK:LUNMF, LUNCF]]) - that are very comfortable in high-risk jurisdictions.
Oct. 12, 2014, 3:37 AM
- JSW Steel has reportedly offered to take control of London Mining (OTC:LIIGF) by buying up its loans at a sharp discount.
- Frank Timis, chairman of African Minerals (OTCPK:AMLZF), is also reportedly bidding for London Mining through his family company.
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) has decided not to bid after considering entering the fray.
- On Friday London Mining said talks with relevant strategic partners had ended, and it was expected to enter receivership on Monday.
- Related: London Mining warns shares could have "no value" (Oct. 8)
Oct. 10, 2014, 6:11 PM
- Rio Tinto (NYSE:RIO) may decide that its best defense against another takeover approach from Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is buying the likes of Freeport McMoRan (NYSE:FCX) in a "classic kind of defensive move," Bernstein analyst Paul Gait speculates.
- While Rio is saying it’s better off going it alone, a deal for FCX could help it ward off any further advances from Glencore as well as provide a way to lessen its dependence on iron ore at a time when the metal is slumping, Gait says.
- FCX "fits all the criteria of an attractive takeout candidate and would make sense for... anyone looking to increase their copper exposure and getting some very high-margin energy assets at the same time,” BB&T's Garrett Nelson adds.
- FCX shares are now at their cheapest in more than 15 months relative to EBITDA.
Oct. 8, 2014, 10:30 AM
- With any hope of Glencore (OTCPK:GLCNF, OTCPK:GLNCY) buying Rio Tinto (NYSE:RIO) on hold for six months, Glencore could turn to other targets such as Fortescue Metals (OTCPK:FSUMF) or Rio could pursue a defensive deal with a company such as Anglo American (OTCPK:AAUKF, OTCPK:AAUKY), Sanford Bernstein analyst Paul Gait speculates.
- In the past, “we have had that kind of one action precipitate a whole cascade of events that puts a number of other guys in play," Gait tells Bloomberg.
- On the other hand, Glencore's pursuit of Rio may not be over, Gait says, adding "the industrial logic and the strategic logic are compelling to the point of being overwhelming."
Oct. 7, 2014, 10:33 AM
- Rio Tinto (RIO -4.1%) drops sharply after Glencore (OTCPK:GLCNF, OTCPK:GLNCY) states it is no longer interested in pursuing a combination with Rio.
- Glencore says it will be subject to Rule 2.8 of the City Code on Takeovers and Mergers for six months in relation to Rio while reserving the right to make an offer in the future.
- Rio had said earlier that it rejected a Glencore bid in August and that no discussions are taking place.
Oct. 7, 2014, 8:26 AM
- Rio Tinto (NYSE:RIO) is up more than 5% in London trading after the miner said a deal with Glencore (OTCPK:GLCNF, OTCPK:GLNCY) was not in the best interests of shareholders, and there had been no contact between the companies since August.
- Analysts caution that investors may be jumping in too swiftly, seeing the potential value of a deal but overestimating the likelihood of an agreement being struck.
- Glencore has many reasons to chase Rio, and to not take the rejection in July as the final word, but the idea is less compelling for Rio, which sees itself as a specialist top-drawer miner with a marketing business attached, and views Glencore as the reverse.
- A formal bid could face regulatory concerns in Australia, where Rio mines most of its iron ore and has a listing on the country’s stock exchange.
- RIO -1% premarket after surging 9% in yesterday's trade.
Oct. 6, 2014, 7:17 PM
- Rio Tinto (NYSE:RIO) says it rejected an informal approach from Glencore (OTCPK:GLCNF, OTCPK:GLNCY) about a potential merger in August and has had no further contact.
- Rio rose 9.1% in the session after a Bloomberg report around midday said Glencore had been laying the groundwork for a potential deal with Rio next year and has reached out to Rio’s biggest investor, Chinalco (NYSE:ACH), to gauge its interest in a deal.
- Clarkson Capital notes that while a strategic merger would make sense, it believes too many obstacles would need to be overcome for a deal to happen; also, Rio's ADR share price is down less than 10% YTD even as iron ore prices are down more than 40% (Briefing.com).
Oct. 6, 2014, 12:16 PM
- Rio Tinto (RIO +9.8%) skyrockets on a Bloomberg report that Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is laying the groundwork for a potential merger with the company in the next year that would create the world’s largest mining company.
- Glencore is said to have has reached out in recent weeks to Chinese state-backed Chinalco (NYSE:ACH), which is Rio’s largest shareholder with a ~9.8% stake, to gauge its interest in a potential deal.
- However, no talks are yet underway between the two companies, no formal offer has been made, and none is likely before the end of 2014.
Sep. 3, 2014, 12:55 PM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) CEO Ivan Glasenberg rejects speculation about a possible takeover of Anglo American (OTCPK:AAUKF, OTCPK:AAUKY), saying the miner is interested only in assets it already trades.
- “With Anglo, we don’t trade diamonds... and we don’t trade platinum,” Glasenberg says.
- A Jefferies analyst wrote yesterday that a Glencore bid for Anglo is increasingly possible as the stock widens its outperformance over its smaller rival, and Anglo CEO Mark Cutifani told WSJ yesterday his company is open to takeover offers.
Aug. 19, 2014, 6:29 PM
- BHP Billiton's (NYSE:BHP) move to spin off a raft of assets it deems non-core - businesses that employ ~25% of the company's current workforce but deliver less than 10% of its profits - creates a new midsize metals player that could become a prime takeover target for rivals.
- WSJ mentions Glencore (OTCPK:GLCNF, OTCPK:GLNCY) as a potential suitor, and Mick Davis, the former CEO of Xstrata who left the company when it merged with Glencore, is on the lookout for acquisitions for his new investment vehicle.
- On the other hand, the new BHP entity could suffer from dis-synergies after the spinoff, potentially facing higher costs in borrowing funds and procuring supplies.
Nov. 27, 2013, 7:18 AM
- Teck Resources (TCK), Newmont Mining (NEM), Blackstone (BX) and Magris Resources, a firm led by former Barrick CEO Aaron Regent, have joined together to bid for Glencore Xstrata's (GLCNF) Las Bambas copper mine in Peru.
- Initial bids for the project came it at $6B, with the next round due in December.
- The frontrunner has so far been China's Minmetals (MMETY), especially given the country's need for copper.
- Glencore Xstrata is selling Las Bambas as part of the conditions that China gave for approving Glencore's merger with Xstrata.
Oct. 25, 2013, 5:29 AM
- Rio Tinto (RIO) is reportedly in advanced negotiations to sell its 50.1% holding in a coal mine in Australia to Glencore Xstrata (GLCNF; GLNCY) and Japan's Sumitomo (SSUMY; SSUMF) for around $1B.
- Glencore Xstrata and Sumitomo would each buy half of Rio's stake in the Clermont mine in the state of Queensland. The deal could be signed today.
- The sale is part of Rio's strategy of divesting assets as it looks to cut debt that reached almost $19B last year.
- Update: The sale is confirmed for $1.015B.
Aug. 5, 2013, 7:51 AM
- Glencore Xstrata (GLCNF.PK) agrees to sell Joe White Maltings, Australia’s biggest malt producer, to rival commodities trader Cargill for a reported ~A$420M ($373M).
- The deal underscores ongoing interest in Australian assets from firms such as Archer Daniels Midland (ADM) and Bunge (BG) that dominate the world’s trading of agricultural commodities.
- The unit had been acquired through Glencore’s $6.2B takeover of Canadian grain handler Viterra last year.
Jul. 5, 2013, 3:12 PMCanada's two largest pension funds are sounding out potential partners for separate bids to acquire Rio Tinto's (RIO -1.8%) ~$4B in Canadian iron ore assets, WSJ reports. CPP Investment Board is said to be working with Apollo Global (APO) and others; Blackstone (BX) and Glencore Xstrata (GLCNF.PK) reportedly also have expressed interest. (earlier) | Comment!
Jun. 2, 2013, 6:40 PMGlencore Xstrata (GLCNF.PK) and Blackstone (BX) may bid for Rio Tinto's (RIO) 59% stake in Iron Ore of Canada, sources tell WSJ. RIO put the position up for sale earlier this year. Some say Blackstone is the more likely suitor given that Glencore is still busy integrating Xstrata. The Journal notes that mining companies are becoming "more cautious on bidding for new assets [as] investors demand restraint on spending [amid] falling commodity prices" (previous). Bankers say this has opened the door for private-equity. | Comment!
GLCNF vs. ETF Alternatives
Glencore Xstrata is one of the worlds largest global diversified natural resource companies and is one of the ten biggest companies within the FTSE 100 Index. The Groups industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries.
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