Oligarchs set to put in lower bid for ENRC
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Monday 24 June 2013
The scandal-riven oligarchs behind mining group ENRC today looked poised for success in their attempts to buy the company for a knockdown price of £3 billion after they secured the reluctant backing of its biggest shareholder, and rival, Kazakhmys.
Shares in Kazakhmys tumbled more than 10 per cent on the announcement, which was accompanied by an admission from Kazakhmys chairman Simon Heale that the bid possibly undervalued the shares, but that it had no option but to accept.
ENRC, currently being investigated by the Serious Fraud Office, has been a magnet for controversy pretty much since it floated on the London Stock Exchange six years ago and bought, via middleman Dan Gertler, a vast mining resource in the Congo that had been stripped from its former owners.
The oligarchs behind ENRC — Alexander Machkevitch, Alijan Ibragimov and Patokh Chodiev — have, with the financial backing of another shareholder, the Kazakh government, been trying to buy the shares they don’t already own in the business and take it private again. Together, they own 54 per cent.
The Kazakh government has pledged its 27 per cent stake in Kazakhmys as part of the deal.
However, the oligarchs and the government are only willing to pay $1.6 billion cash plus the government’s stake to buy out the remaining 46 per cent. That represents a value of 227.6p a share, much less than the consortium’s first offer of about 260p a month ago.
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