Glencore-Rio merger will happen hedge funds told
"What Ivan buys next" has been a favourite mining sector parlour game even before the Swiss firm went public in 2011 making CEO Ivan Glasenberg one of the richest people in the world.
There is no shortage of possible takeover targets for Glencore, with a market value of $70 billion and an outperforming share price.
The most intriguing idea that's floating around is a merger between Glencore and Rio Tinto, which would combine the world's second and fourth largest miner and knock BHP Billiton off its throne.
After going away for a while talk that a combination may happen after all is resurfacing with Ian Hannam, the once and future king of mining M&A, jockeying for position in the event of a mega-merger Bloomberg reports:
Hedge funds including GLG Partners, DE Shaw & Co, and Pentwater Capital Management were told this month by a prominent London mining banker to prepare for an all-but-inevitable takeover of Rio Tinto Group by Glencore Plc (GLEN), according to people familiar with the meeting.
Former JPMorgan Chase & Co. dealmaker Ian Hannam, who now runs a boutique advisory firm, convened representatives of more than 20 investors at Corrigan’s Mayfair restaurant in the British capital in mid-November to share his views on the potential deal, the people said, asking not to be identified discussing a private matter. The meeting was intended in part to help position Hannam’s firm, Hannam & Partners, to win a role in the transaction, the people said.
“If not today, this deal will happen sometime in the near future,” Hannam said in his presentation, according to a copy seen by Bloomberg. “Glencore is M&A savvy and times deals well. The combination will create a super-major with a diversified portfolio of world-class mining assets.”