ENRC Founders Said to Offer Below 300 Pence in Bid Letter

Eurasian Natural Resources Corp.’s founding shareholders outlined a planned bid for the company at less than 300 pence a share in a letter to its independent committee of directors, people familiar with the matter said.

The people asked not to be identified because the details of the letter aren’t public. The committee said in a later statement issued by ENRC that it had received a “conditional, indicative proposal” from the bidding group that “materially undervalues” the company. It gave no details of a price.

The ENRC directors requested an extension to June 3 of today’s deadline for the bidding group to submit a formal offer, according to the statement. The extra time will allow the group to revise its proposal to one “that may be capable of being recommended by the independent committee to ENRC’s minority shareholders,” ENRC said.

ENRC founders Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov, together with the Kazakh government, said April 19 they are considering taking the company private. The group owns 54 percent of ENRC. Kazakhmys Plc, Kazakhstan’s biggest copper producer, owns 26 percent of ENRC.

ENRC plunged 8 percent to 271.6 percent by the close in London, the biggest drop in nine months, and valuing the company at about $5.3 billion.

A Representative of the bidder group declined to comment.

ENRC’s assets include iron ore, ferroalloy and power production operations in Kazakhstan, copper and cobalt businesses in Africa and a Brazilian iron ore project.

The company traces its roots to the founders’ participation in the 1990s privatizations of Kazakh state assets, which were gradually combined into a single group of companies and listed in London in 2007.

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