Glencore is reportedly in the midst of negotiations to sell a further 9.9% stake in its agri unit, according to Reuters.
Unnamed sources revealed that Glencore is conducting talks with parties that were outbid by the Canada Pension Plan Investment Board (CPPIB) that recently acquired a 40% stake in the unit for $2.5 billion, including Saudi Agricultural and Livestock Investment Co. (SALIC), another Canadian pension fund, and Qatar’s sovereign wealth fund.
Given this valuation, the total value of the unit including inventories and debt is approximately $10 billion, and the value of a 9.9% stake would be $625 million.
"Negotiations are ongoing,” one source told Reuters ... “people who lost out are still trying to get on board, but Glencore will struggle to get more money for it.” Another possible challenge that may hinder the sale is the question of whether the new minority stakeholder will be granted voting rights as CPPIB was under the terms of its acquisition, according to the sources.
Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at email@example.com.