The prospectus for the $60bn London flotation of Glencore will not detail its ambition to take over FTSE-100 miner Xstrata, in effect ruling out the megadeal anytime soon.
The Swiss commodities trader owns 34 per cent of Xstrata and Glencore's chief executive, Ivan Glasenberg, is known to want to merge the groups. Some have speculated that this could happen soon after next month's flotation.
However, a senior banking source close to Glencore said that the prospectus would not include the plan, so it would be difficult to strike a deal in the first months after the listing. "If an Xstrata deal came out in July or August, investors would be entitled to ask why the hell there was nothing about it in the prospectus," he said. Autumn is now the earliest realistic time for a deal, he said.
Another potential transaction that investors will not see in the prospectus is the $5bn spin-off of Glencore's gold assets, Kazzinc. This subsidiary owns Kazakhstan's biggest gold mine and is thought to produce about 800,000 ounces of gold a year. Again, this means that the smaller flotation will not take place until the end of the year at the earliest.
If Glencore and Xstrata ever do merge, they will have to sort out the fate of a third FTSE-100 natural resources group, Lonmin. Xstrata owns a quarter of Lonmin's stock and has tried to buy the platinum miner in the past. However, a combined Xstrata-Glencore would not want to take it over. Glencore is undertood to be uninterested in a commodity as expensive as platinum.
Glencore is expected to raise around $11bn when it sells 20 per cent of the company's shares in London and Hong Kong next month. A further 10 per cent might be listed if there is sufficient demand for the stock.
The scale of the company's interests means that institutional investors who might not be a fan of the stock will almost inevitably take a small holding.