Eurasian Natural Resources Corp. Plc (ENRC.L) has rejected a cash and stock offer from a consortium to own the remaining shares in the company, on the ground that the bid materially undervalues the copper producer. The deal value is estimated to be $4.8 billion.
The consortium consists of ENRC's three founders - Patokh Chodiev, Alijan Ibragimov, Alexander Machkevitch - and the Committee of the State Property and Privatisation of the Ministry of Finance of the Republic of Kazakhstan, which is acting on behalf of its Government, and JSC Sovereign Wealth Fund "Samruk-Kazyna."
Alexander Machkevitch had said on April 19 that he is in the preliminary stages of forming a consortium to assess a potential offer for ENRC.
The company's Independent Committee of the Board received a conditional, indicative proposal on May 16 from the consortium.
The three founders and the government do not hold around 46 percent of ENRC. Rival Kazakhmys has a 26 percent stake in the copper miner. The offer is said to be in the form of 175 pence per share in cash and 0.231 of one Kazakhmys share.
The Independent Committee Friday said it requested the Panel on Takeovers and Mergers to extend the deadline to June 3 and the panel consented to it. By that time, the consortium must announce a firm intention to make an offer for the company or announce that they do not intend to bid.
The extension will allow the consortium sufficient time to submit a revised proposal that may be recommended by the Independent Committee to ENRC's minority shareholders.
The Independent Committee consists solely of independent non-executive directors of the company. Dr Mohsen Khalil, Chairman of the Independent Committee, said, ''We believe the current proposal materially undervalues ENRC, and we will use the extension to seek an improved and formal proposal.''
ENRC.L fell over 8 percent on Friday to settle at 271.60 pence.
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