ENRC co-founder Machkevich may form group to bid for miner
LONDON. April 21. KAZINFORM Eurasian Natural Resources Corp. (ENRC) shareholder Alexander Machkevitch said he is considering joining his two fellow founders and the Kazakh government to make an offer for the mining company.
The deliberations are at a preliminary stage and there can be no certainty that an offer will ultimately be made for ENRC, Machkevitch said today in a statement. ENRC surged 27 percent to 291 pence in London trading, valuing the company at 3.7 billion pounds ($5.6 billion).
Machkevitch and fellow controlling shareholders Patokh Chodiev and Alijan Ibragimov own almost 44 percent of the company. ENRC has iron ore, ferroalloy and power-production operations in Kazakhstan, copper and cobalt businesses in Africa, and a Brazilian iron ore project. Today's announcement followed a 58 percent slump in the past year because of lower commodity prices and corporate governance concerns.
"An offer for the company appears opportunistic given ENRC shares have been very weak," Liberum Capital Ltd. said in a note. About 18 percent of ENRC's shares are freely tradable, suggesting an acquisition cost of about $1 billion based on today's share price, Kazinform refers to Bloomberg.
The mining company advised its shareholders to take no action. "The board confirms that it has not received any proposal that could result in an offer or possible offer for the group," ENRC said in a statement. Machkevitch has until May 17 to make a firm offer under U.K. takeover rules.
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