Glencore strengthens grip on target

Glencore, the world’s largest commodity trader, said yesterday that it had almost doubled its stake in South African takeover target Optimum Coal to 23.9 per cent.

By The Newsroom

Published 7th Sep 2011, 07:00 BST

Glencore said in a statement it had bought about 24.6 million shares at an average price of 37.98 rand ($5.334) a share on Monday.

The price paid was more than the 34 rand per share that a consortium of Glencore and a company owned by its South African partner, politician-turned-tycoon Cyril Ramaphosa, had publicly offered.

That valued the company at around $1.1bn (£682.5m).

It is the Swiss-based trader’s largest takeover bid since its May stock market listing.

Glencore’s deep pockets and Mr Ramaphosa’s influence would make for a formidable bid that could nullify any opposition from unions or shareholders.

The drive into South African mining comes amid investor uncertainty about regulatory requirements such as black ownership targets as well as nationalisation talk, steeply rising costs and labour militancy.