Everything You Need To Know About The Glencore IPO

glencore billionaires

Glencore Iisted on the London and Hong Kong stock exchanges today.

With the commodities trading giant going public, there are several instant billionaires, and hundreds of new millionaires.

This IPO has been as hyped as Goldman Sachs’s was 12 years ago, and for good reason.

It’s already trading up.

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permalink=”where-it-all-started-the-founder-marc-rich-1″
title=”Where it all started: The founder, Marc Rich”
content=”Glencore, originally called Marc Rich & Co, was founded by billionaire commodities trader Marc Rich in 1974.

Born Marcell David Reich, his family left Europe in 1941 to escape the Nazis. He dropped out after a semester at NYU to work for Phibro.

Rich was indicted after unlawful oil deals with Iran in the 70s and 80s, and was also charged with tax evasion. He was subsequently pardoned by President Clinton.

He sold his majority stake in then-Marc Rich &Co when he lost the firm $172 million in the zinc market, and nearly bankrupted the firm. But his legacy remains; CEO Ivan Glasenberg was said to be a ‘lieutenant’ in his ‘oil-trading inner circle.’

Source: Wikipedia and BBC
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permalink=”whos-running-the-show-now-ceo-ivan-glasenberg-2″
title=”Who’s running the show now: CEO Ivan Glasenberg”
content=”Ivan Glasenberg, who’s ‘short, dark and intense [and] talks in staccato bursts of facts,’ was born in South Africa.

He has a BA in Accountancy from the University of the Witwatersrand, then worked as an accountant for five years, then got his MBA from USC.

He joined Glencore in ’84 in the coal department, then quickly rose through the ranks to become of head of the Hong Kong and Beijing offices in ’89. Two years later, he was put in charge of the coal department. He was made CEO in 2002.

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[slide
permalink=”an-ipo-as-hyped-as-goldmans-back-in-1999-3″
title=”An IPO as hyped as Goldman’s back in 1999″
content=”Glencore’s IPO has been much anticipated, with the hype around the listing being compared to Goldman’s 1999 IPO across the financial media.

‘I can’t recall a flotation like it,’ the BBC’s business editor, Robert Peston wrote, ‘in terms of the sheer number of executives emerging as wealthy beyond most people’s wildest dreams or expectations — not even the conversion of Goldman Sachs into a public company or the listing of Google.’

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[slide
permalink=”its-the-biggest-ipo-in-the-history-of-the-london-stock-exchange-4″
title=”It’s the biggest IPO in the history of the London stock exchange”
content=”Glencore’s IPO will be ‘the biggest to date in the UK and will see Glencore become only the third company — and the first in 25 years — to enter the FTSE 100 index on its first day of trading.’

Sources told the FT the company is hoping for a 5-10% share price rise on its first day of public trading.

Source: FT
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permalink=”the-pricing-530-pence-update-its-already-up-after-the-opening-of-trade-today-5″
title=”The Pricing: 530 pence (UPDATE: it’s already up after the opening of trade today)”
content=”Glencore will price each share at 530 pence, making the commodities behemoth worth 36.5 billion pounds, or about $59 billion here in the U.S.

‘With a 10 per cent overallotment option likely to take the total size of Glencore’s offering to $11 billion, it is set to be London’s largest-ever listing, overtaking Russia’s Rosneft, which raised $10.6 billion in 2006.’

UPDATE: The shareprice is already up in today’s trading.

Source: Reuters
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permalink=”5-instant-billionaires-6″
title=”5 instant billionaires”
content=”12 senior Glencore executives own 31% of the company’s stock, which will be worth close to $19 billion ‘if the entire Glencore business is valued at $60 billion as expected.’

The stakes held by 5 of those executives will make them instant billionaires (if a couple aren’t already).

  • CEO Ivan Glasenberg will be worth about $10 billion, due to his ~15% stake.
  • The heads of Zinc, Copper and Lead, Daniel Mate and Telis Mistakidis ‘each own 6.9% before the IPO, falling to 6% after the offering,’ according to Reuters. This makes them worth around $3.7 billion each.
  • Head of the coal department, Tor Peterson, owns 5.3% of the company and which will be worth about $3.2 billion.
  • The Global Head of Oil, Alex Beard, has a 4.6% stake so will see his bank account surge by about $2.8 billion.

Source: FT
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permalink=”hundreds-of-instant-millionaires-7″
title=”Hundreds of instant millionaires”
content=”At least 500 Glencore employees own a stake in the firm.

‘Following its flotation… Glencore’s partners will be sitting on shares worth, on average, $100 million each,’ according to the Guardian.

CFO Steve Kalmin, an Australian who joined the company in 1999, ‘will top the list of millionaires with a $610m stake,’ said the FT.”
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permalink=”there-will-be-no-immediate-cash-outs-8″
title=”There will be no immediate cash-outs”
content=”Management is ‘saying they won’t sell any of their shares for five years at least — that they won’t use the flotation to cash in. As for Glasenberg, he’s pledging not to sell even a single share till he steps down as chief executive.’

In fact, the highest-ranking executives aren’t selling-out for at least five years because they’re forbidden from doing so; the other shareholders can’t sell their shares for at least one year.

Source: BBC
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permalink=”big-name-investors-are-already-on-board-9″
title=”Big-name investors are already on board”
content=”Glencore’s IPO has already ‘attracted so-called cornerstone investors including BlackRock Inc. and Abu Dhabi’s sovereign wealth fund.’

And apparently most of the other investors who wanted the shares ‘may only get about 25 per cent of what they asked for because the order book is oversubscribed.’

Source: Bloomberg
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permalink=”glencores-revenue-last-year-145-billion-10″
title=”Glencore’s revenue last year: $145 billion”
content=”In 2010, Glencore recored revenue of about $145 billion — $144.978 billion to be precise.

Source: Glencore
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[slide
permalink=”and-as-for-the-future-theres-talk-that-it-will-acquire-miner-xstrata-11″
title=”And as for the future, there’s talk that it will acquire miner Xstrata”
content=”Analysts and media reports predict that Glencore will merge with London-based miner, Xstrata, of which it already owns 34%.

‘We continue to believe that Glencore will look to merge with Xstrata via a zero-premium merger within the next first 11 months once we pass two reporting periods for Glencore and have a decent share-price track record,’ Sanford Bernstein said in early May.

Source: Businessweek
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permalink=”now-dont-miss-the-biggest-winners-from-todays-ipo-12″
title=”Now don’t miss the biggest winners from today’s IPO…”
content=”Meet The 5 People Who Are About To Become Billionaires From The Huge Glencore Listing >
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