Investors in rush for a share of trader Glencore

Bucking a recent trend for struggling European listings, which have seen investors wait until very late in the usually two-week bookbuild to place orders, Glencore has already received demand for all the shares it is offering, including a 10 per cent overallotment option.

“We had a good response on day one, there is a lot of pent-up demand,” one of the sources said yesterday.

The sources said it was too soon to say where in the indicated 480-580 pence per share range the much-anticipated offering would be priced on May 18.

That range, announced on Wednesday, values the company at £36.5bn at the mid-point, below the price some analysts have valued Glencore at.

“The books are covered on the full deal size, including the greenshoe,” said the source. “Given the amount of interest we have seen in the transaction, we thought we would be covered pretty early but I think it just reflects ... that the price range was the right price range.”

Demand for Glencore shares will also have been boosted by the fact is due to be fast-tracked into the blue-chip FTSE 100 index at the end of its first day of trading.

The London and Hong Kong listing, in which Glencore is looking to raise around $7.9bn from new shares and $2.1bn from existing shares, will boost its firepower for deals amid a boom in commodity prices. But it will also push it into the public eye after 37 years as a discreet private company.

Glencore’s estimate of its future market capitalisation puts the company just above the mid-point of a wide $45-$73bn value implied in its intention-to-float last month. The mid-point of analyst research was around $60bn, though that excludes proceeds from the offering.

Before the start of bookbuilding on Wednesday, Glencore struck agreements with cornerstone investors who will collectively buy around 31 per cent of the total offer, one of the largest cornerstone books to date.

The largest investor, Abu Dhabi’s IPIC Aabar, which has already committed $850m to the listing, also plans to invest an additional $150m in the offering.