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Founders’ consortium makes ENRC offer

Keywords: Tags  Eurasian Natural Resources, ENRC, Alexander Machkevitch, Alijan Ibragimov, Patokh Chodiev, Kazakhstan, Kazakhmys, founders offer

LONDON — A consortium of Eurasian Natural Resources Corp. (ENRC) founders has made a firm offer for the company valued at about $4.7 billion through newly incorporated Eurasian Resources Group BV.

Eurasian Resources was formed on behalf of the consortium, which includes founders Alexander Machkevitch, Alijan Ibragimov and Patokh Chodiev, as well as representation from the government of Kazakhstan.

For each ENRC share, the consortium is now offering $2.65 in cash and 0.23 consideration shares in London-based diversified miner Kazakhmys Plc, which already owns a 26-percent stake in the company.

The offer does not currently have the recommendation of the ENRC independent committee set up to examine it. Eurasian Resources has said it hopes that the committee will recommend relevant ENRC shareholders accept the proposed deal.

The share price performance of ENRC in recent years has been "disappointing" and has "materially lagged" behind its peers, according to the consortium.

While the founders and the Kazakh government have said they are confident of the quality and potential of ENRC’s key businesses, they also said that they believe the value of the company can only be fully realized if it is not a listed company. This will "allow greater management focus on operational performance," the consortium said.

The Kazakh government has said it has a particular interest in stabilizing the operating and financial performance of the company, given that it employs about 66,700 people in Kazakhstan and also provides infrastructure support in some areas. 

A version of this article was first published by AMM sister publication Metal Bulletin.

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