KAZAKHMYS yesterday broke its silence on the takeover battle surrounding ENRC, saying it would consider a potential cash-and-share buyout bid for its rival, in which it owns a 26 per cent stake.
ENRC’s billionaire co-founders Alexander Mashkevitch, Alijan Ibragimov and Pathokh Chodiev said in April they were weighing up a buyout to take the company private.
The structure of the current indicative proposal would include $1.6bn (£1.05bn) in cash but also the Kazakh government’s almost 27 stake in Kazakhmys.
Kazakhmys shares rose as investors welcomed a mooted offer structure that even at current levels – below ENRC’s market price and the stake's value on Kazakhmys books – would mean $890m of cash for Kazakhmys and 77m of its own shares.
ENRC, which listed in London in 2007, has been hit by bitter boardroom battles, corruption probes and an ill-timed acquisition spree that left it with $5bn of debt.
“All things considered, we would view the sale of its stake in ENRC – even based on the initial offer – as a positive for Kazakhmys,” analysts at brokerage Jefferies said in a note.
“The cash would strengthen the company’s balance sheet and a removal of the overhang (of ENRC shares) would likely lift Kazakhmys’s equity valuation.”
In a statement, Kazakhmys said its shares in ENRC were “not considered a strategic investment ... The board will give due consideration to any proposal made by the consortium to shareholders at the appropriate time”.
The Takeover Panel said yesterday it considers Kazakhmys to be a party to the offer.