Glencore launches Optimum Coal takeover bid

1st September 2011, Comments 0 comments

Commodities giant Glencore announced Thursday it was interested in acquiring a controlling stake in South Africa's Optimum Coal through a partnership with local businessman Cyril Ramaphosa.

In a statement, Glencore said it would offer 34 rands per share for 43.51 percent of Optimum Coal's stock, a transaction which would be worth around 3.7 billion rands (370 million euros, $528 million).

The deal offers shareholders a 2.7 percent premium on the stock's closing price on Wednesday.

"Optimum's high quality, long life coal assets and significant presence at Richards Bay Coal Terminal would be an attractive addition to our existing South African coal business," Glencore said in a statement.

The purchase would give Glencore access to "two high quality mining assets: Optimum Collieries and Koornfontein Mines" and "8 million tons of coal export entitlements from Richards Bay Coal Terminal", Glencore said.

Optimum Coal announced Monday that Glencore had already purchased 14.1 percent of its capital, confirming press rumours.

Glencore said it would acquire the controlling interst in Optimum Coal through a consortium with former anti-apartehid activist Cyril Ramaphosa, now one of South Africa's most powerful businessman.

The consortium will consist of Glencore wholly-owned subsidiary Piruto BV and Ramaphosa's Lexshell 849 Investments.

Ramaphosa left political life in 1997 to focus on his business activities, after falling behind Thabo Mbeki in the race to succeed Nelson Mandela.

In the statement, Glencore also said it would maintain Optimum Coal's "Black Economic Empowerment" status.

Optimum Coal describes itself as one of South Africa's biggest coal mining firms, and the country's six-largest thermal coal producer.

The company last year registered profits of 229.7 million rands, a drop of 69 percent from the previous year, on net sales down 15 percent to 3.4 billion rands.

Glencore, which listed on the London and Hong Kong markets this May, has been on a buying spree in recent weeks.

In August the Switzerland-based giant announced a takeover bid for Australian nickel miner Minara, of which it already owned 73 percent.

A month earlier, in July, it announced it would take a 70 percent stake in Peruvian firm Marcobre for $475 million (332 million euros).

In London, Glencore share were down 3.06 percent at 1250 GMT, selling at 408.55 pence.

© 2011 AFP

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