Glencore seen pushing on with May IPO: investors

Mon Mar 21, 2011 10:15am EDT
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By Sinead Cruise and Tommy Wilkes

LONDON (Reuters) - Commodities trader Glencore is seen clinging on to plans for a bumper London listing by the end of May, despite global stock market uncertainty, according to a Reuters poll of fund managers.

The survey of 10 fund managers from investment houses controlling total global assets of $3 trillion found a majority assuming the deal will proceed before a summer listings hiatus, despite the near panic on markets caused by the Japan disaster.

Six of the 10 said they thought it unlikely Glencore would peg back its long-term plans for an initial public offering (IPO), with some suggesting a backlash against nuclear energy could boost its oil and coal trading activities.

Only two said they thought recent events pose a serious threat to the expected timetable.

Most managers acknowledged heightened uncertainty as a result of conflict in Libya and Japan's nuclear crisis made the deal a tough call. And two said it was too early to tell whether a high profile equity capital markets deal like Glencore's would be hit given the unpredictability of events.

A significant proportion of the managers said recent market corrections could widen the gulf between Glencore management's expectations on price and what investors will be willing to pay.

Fund managers participated in the poll on condition of anonymity because of the possible impact their views might have on pricing the proposed initial public offer (IPO).

"I don't think people really know how to value this business and I suspect maybe, the people at Glencore place quite a high value on (it) and that might be rather higher than the market is prepared to give," said a senior equities manager at a fund house running more than $700 billion in global assets.   Continued...