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Glencore Said to Set IPO at or Above Middle of Initial 480-580 Pence Range

Glencore International Plc, seeking as much as $11 billion in an initial public offering, will price the sale at or above the midpoint of its earlier announced range, according to three people with knowledge of the sale.

Shares in the offer will be sold at 530 pence apiece or more, the people said, declining to be identified because the information is private. The company’s initial, May 4 range of 480 pence to 580 pence was revised yesterday to 520 pence to 550 pence, according to a term sheet obtained by Bloomberg News.

Demand for the stock weathered a rout in raw-material prices in the week ended May 6 that wiped out $99 billion of market value, the biggest weekly decline in two years. The 19- member FTSE 350 Mining Index (F3MNG) has dropped about 7 percent this month.

“We find this upward revision quite surprising given the recent selloff in commodities and decline in mining share prices,” Paul Galloway, a London-based analyst at Sanford C. Bernstein Ltd., wrote in a note today, referring to the 520- pence to 550-pence range reported yesterday. “Glencore stock appears to be reasonably but not attractively valued” at the midpoint of that range, he said.

Investors who have set price limits for their orders of less than 530 pence will probably miss out on acquiring shares in the offer, one of the people said. A final price of 530 pence would value Glencore, excluding funds to be raised, at about $51.6 billion, according to the terms of the sale document.

Simon Buerk, a spokesman for Baar, Switzerland-based Glencore, declined to comment.

Aabar, Blackrock

The company is offering as many as 1.25 billion shares. The IPO, the largest since General Motors Co. sold stock in November, has attracted investors including Abu Dhabi’s Aabar Investments PJSC and BlackRock Inc. Demand has been enough to sell the shares on offer more than twice over, three people familiar with the transaction said May 12.

Citigroup Inc., Credit Suisse Group AG and Morgan Stanley are managing the IPO as global coordinators, along with Bank of America Corp. and BNP Paribas as joint bookrunners. Barclays Plc, Societe Generale SA and UBS AG are co-bookrunners.

Orders will close at 4 p.m. London time today, except for investors meeting management after this date, according to the sale document. Glencore expects conditional dealings in the shares to start on the London Stock Exchange around May 19 and admission and unconditional trade to begin on May 24.

The company, which trades commodities including coal, oil and metals, plans to sell about $7.9 billion of new stock, while existing holders may offload an additional $2.1 billion in shares for tax purposes and to repay loans. The IPO includes an overallotment option, known as the greenshoe, of 10 percent of the offer, allowing Glencore to raise as much as $11 billion.

To contact the reporters on this story: Sarah Jones at sjones35@bloomberg.net; Jesse Riseborough in London at jriseborough@bloomberg.net; Zijing Wu in London at zwu17@bloomberg.net.

To contact the editor responsible for this story: Amanda Jordan at ajordan11@bloomberg.net.

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