Eurasian Natural Resources Corp. (ENRC)’s founders, together with the Kazakh government, are preparing an offer that values the mining company at 3.04 billion pounds ($4.7 billion), the bidding group said.
The proposal by ENRC’s Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov and the Kazakhstan government would offer stockholders $2.65 in cash and 0.23 Kazakhmys Plc (KAZ) shares for each ENRC share held, the Bidco group said today in an e-mailed statement.
Bidco is “in the advanced stages of preparing a possible offer” equivalent to 234.3 pence per ENRC share at current exchange rates, the newly incorporated group said in the statement. ENRC closed June 21 at 216.90 pence, giving the iron-ore and ferroalloys producer a market value of 2.79 billion pounds, and Kazakhmys at 269.40 pence.
The founders are seeking to take ENRC off the market five years after it sold shares in an initial offering in London. ENRC shares have fallen by almost half the past year as the company fought corruption allegations relating to operations in Kazakhstan and Africa.
The bidding company has until 5 p.m. London time tomorrow to announce a firm intention for offer or say they won’t under U.K. takeover rules. ENRC’s founders had received a three-week extension on June 3 to make a bid for the company.
The founding shareholders and Kazakh government, together holding almost 54 percent, sent a letter in May to an independent committee set up by ENRC’s board detailing an offer at 175 pence, equal to $2.65 at the time, in cash plus 0.231 shares of 26 percent-holder Kazakhmys. That was equivalent to 260 pence a share based on a 370-pence Kazakhmys price, the committee said May 20, concluding that the offer “materially undervalues” London-based ENRC.
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