HONG KONG—Sovereign wealth funds from Singapore and the Middle East are in advanced talks to acquire shares in Swiss commodities giant Glencore International AG's dual listing on the London and Hong Kong stock exchanges, according to people familiar with the situation.
Glencore is looking to raise as much as US$12.1 billion in its initial public offering and has been searching for large investors to turbo-charge its share sale. These so-called cornerstone investors are swapping certainty that Glencore will allocate them shares during the offering in exchange for not selling the shares for at least six months.
The list of cornerstones includes the Government of Singapore Investment Corp., a Middle Eastern sovereign-wealth fund and U.S. asset manager BlackRock Inc., one of the people said. GIC and BlackRock already own convertible bonds in Glencore.
Other companies set to invest in the Baar, Switzerland-headquartered commodities group include asset managers Fidelity Investments and its international affiliate, the person said. Several Swiss-based private banks and hedge funds Och-Ziff Capital Management Group LLC and Eaton Park Capital Management LP also are considering cornerstone investments, two people familiar with the situation said.
The process of signing up these investors isn't finished, and a price range for the shares due to be released Wednesday could prompt some to pull out while others could join the group, the people said.
Glencore and its bankers are scheduled to announce the names of the cornerstone investors in a prospectus for the share offering at the same time as they reveal the price range, according to a deal terms sheet seen by The Wall Street Journal.
Then Glencore will begin the process of making presentations to drum up interest from more potential investors. According to data provider Dealogic, at the top of the proposed price range, the IPO would be the largest ever in London.
The listing will also be a milestone in the Hong Kong exchange's efforts to attract commodities companies that have traditionally gravitated toward London, Toronto or Australia. Hong Kong's efforts are being aided by its role as a gateway to China, a dominant consumer of energy, minerals, metals and other resources.
Soliciting cornerstone investments to fan interest in an IPO is a common practice in Hong Kong. The presence of big-name investors in an offering is used to market the deal to other investors. Critics say the system artificially creates a scarcity value for the remaining shares that distorts the market.
Source: http://online.wsj.com
Glencore is looking to raise as much as US$12.1 billion in its initial public offering and has been searching for large investors to turbo-charge its share sale. These so-called cornerstone investors are swapping certainty that Glencore will allocate them shares during the offering in exchange for not selling the shares for at least six months.
The list of cornerstones includes the Government of Singapore Investment Corp., a Middle Eastern sovereign-wealth fund and U.S. asset manager BlackRock Inc., one of the people said. GIC and BlackRock already own convertible bonds in Glencore.
Other companies set to invest in the Baar, Switzerland-headquartered commodities group include asset managers Fidelity Investments and its international affiliate, the person said. Several Swiss-based private banks and hedge funds Och-Ziff Capital Management Group LLC and Eaton Park Capital Management LP also are considering cornerstone investments, two people familiar with the situation said.
The process of signing up these investors isn't finished, and a price range for the shares due to be released Wednesday could prompt some to pull out while others could join the group, the people said.
Glencore and its bankers are scheduled to announce the names of the cornerstone investors in a prospectus for the share offering at the same time as they reveal the price range, according to a deal terms sheet seen by The Wall Street Journal.
Then Glencore will begin the process of making presentations to drum up interest from more potential investors. According to data provider Dealogic, at the top of the proposed price range, the IPO would be the largest ever in London.
The listing will also be a milestone in the Hong Kong exchange's efforts to attract commodities companies that have traditionally gravitated toward London, Toronto or Australia. Hong Kong's efforts are being aided by its role as a gateway to China, a dominant consumer of energy, minerals, metals and other resources.
Soliciting cornerstone investments to fan interest in an IPO is a common practice in Hong Kong. The presence of big-name investors in an offering is used to market the deal to other investors. Critics say the system artificially creates a scarcity value for the remaining shares that distorts the market.
Source: http://online.wsj.com
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