Exclusive: Founders seek more time for ENRC bid - sources

Fri May 31, 2013 3:47pm EDT
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By Clara Ferreira-Marques and Megan Davies

LONDON/MOSCOW (Reuters) - The three billionaire founders behind miner ENRC ENRC.L have asked its independent board members for a three-week extension to a June 3 buyout bid deadline, seeking more time to iron out technical details, sources with knowledge of the matter said.

ENRC's founders said in April they were weighing up a buyout of minority investors in the mining group - a move that would take the company private and end a London adventure marked by bitter boardroom battles, corruption probes and an acquisition spree that left it with $5 billion of debt.

The trio - Alexander Machkevitch, Alijan Ibragimov and Pathokh Chodiev - also enlisted the support of the Kazakh government, a key investor in ENRC and London-listed copper mining rival Kazakhmys (KAZ.L: Quote). Together, the bidding consortium holds around 54 percent of ENRC shares.

ENRC's independent directors, however, earlier this month rejected an initial, tentative offer - a buyout proposal in cash plus the government's shares in Kazakhmys that would value ENRC at around $5 billion. Instead, the board gave the trio until June 3 to come up with an improved bid or walk away.

But technical complications, including delays as shares are transferred from individuals to the bidding consortium, forced the trio and the Kazakh government to ask for more time.

"(The suitors) have contacted the (ENRC) board. What the answer will be is not certain, but if there is no extension, there can be no bid," one of the sources said.

A separate source added: "It would be madness for the board not to give enough time for a fully considered offer to be put together."

The board had already been asked for more time when a first extension was granted to June 3, but gave only 14 days.   Continued...

The Boss Mining copper operation, owned by ENRC, is seen from a helicopter in the southern Congolese province of Katanga, January 29, 2013. REUTERS/Jonny Hogg