Glencore is gearing up for its initial public offering (IPO) in London this year and it’s being highly anticipated by the market.
London is trying to revive its reputation as an international financial service center. The IPO is likely to be the largest in the world this year and will give London the boost it needs. It is valued optimistically by analysts as worth $61 billion.
Glencore has been preparing for the IPO which is likely to be priced on May 19, 2011. Underwriters for the IPO include Citigroup, Credit Suisse and Morgan Stanley. Below them are Merrill Lynch, BNP Paribas, Barclays Capital, Société Générale, UBS and Liberum Capital.
The company has seen major profits from its trading arm. These have been growing as fast as its mines, smelters and other industrial assets. This year it is likely that the company will make more money as a miner than as a trader when the bottom line is calculated.
An analyst from Citi wrote that for the next 3 years the industrial assets would make up 60% of the operating earnings before interest and tax. Then it would reduce to about 50% by 2015 as the mining sector caught up as it consolidated its share of profits from Xstrata. Its acquisition of Katanga Mining is a good example of how Glencore has built up its assets through opportunistic and low-priced acquisitions.