[miningmx.com] – GLENCORE was unaware of any undisclosed reasons why its stock soared in trade in Hong Kong and London today amid speculation that the $20bn company was partial to a takeover.
Shares in the group, which is currently seeking to reduce $30bn in net debt by $10bn – a process that includes selling certain businesses – rose as much as 20% in London and ended 72% higher in Hong Kong.
“The board confirms that it is not aware of any reasons for these price and volume movements or of any information which must be announced to avoid a false market in the company’s securities or of any inside information that needs to be disclosed,” it said in a statement to the Johannesburg Stock Exchange.
Shares in the company fell about 30% a week ago forcing its management to issue statements to the effect that it was liquid and could manage its debt in the current depressed state of the commodities market.
The share subsequently regained much of its lost ground over the progress of a week before today’s volatility.
Investec Securities said a takeover of the company was unlikely. “The current enterprise value of Glencore is $67.8bn which includes debt of $50.5bn. It is the debt that remains the issue,” the bank said.
Bloomberg News said on October that Singapore’s sovereign wealth fund, Japan’s Mitsui & Co and at least one Canadian pension fund have expressed interest in buying a minority stake in Glencore’s agriculture business. That business may be worth as much as $10bn, Sanford C. Bernstein & Co. said in a report on Monday.
“The belief that Glencore is having a “Lehman moment’ seems unfounded,” Paul Gait, an analyst at Bernstein, said in a note to investors cited by Bloomberg News.
“While the leverage is clearly of concern it is not anywhere near an immediate existential threat to the company – it is an issue that needs to be managed, and that is exactly what the company is doing,” he said.
Speculation that Glencore CEO, Ivan Glasenberg, was considering taking the company private in order to address its debt problems away from the public glare was also considered wide of the mark.
