Reuters: Hot Stocks: UPDATE 1-ENRC board rejects lowball offer from founding trio

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UPDATE 1-ENRC board rejects lowball offer from founding trio May 17th 2013, 15:46 Fri May 17, 2013 11:46am EDT (Adds details throughout) By Clara Ferreira-Marques LONDON May 17 (Reuters) - The founding shareholders behind Kazakh miner ENRC have indicated they wish to take it private with a buyout at or below the current, depressed market price, an approach rejected by the independent directors. ENRC's independent directors said on Friday they had received an unspecified indicative proposal from a consortium including the trio of founders - Alexander Machkevitch, Alijan Ibragimov and Pathokh Chodiev - the Kazakh government and Kazakhstan's sovereign wealth fund, which together wish to buy out the shares they do not already hold. "We believe the current proposal materially undervalues ENRC, and we will ... seek an improved and formal proposal," the chairman of the independent committee of the board, Mohsen Khalil, said. The board did not, in its statement, detail the offer, but a source with knowledge of the matter told Reuters a letter received by the board on Thursday had detailed a proposal "not materially below" a market price of around 270 pence. The source said the founders, in a letter requesting more time to formulate a bid, outlined several elements that still needed to be resolved, including an agreement between the members of the bidding consortium and final financing deals. The board has agreed to the founders' demand for more time, asking the Takeover Panel to grant them until June 3. The current deadline is 1600 GMT on Friday. ENRC's co-founders said last month they were weighing up a buyout of the miner's minority investors, with the support of the Kazakh government, which is also a major shareholder. At the time, they were given 28 days - until May 17 - to declare a "firm intention" to bid. In the case of a cash offer, under UK rules, this stage requires suitors to lay out details of the bid including confirmation that resources are available. Earlier this week, however, sources with knowledge of the matter said the bidders were still in the throes of hammering out the terms of financing with lenders and were also still working out a formal agreement to tie together their consortium. Together, the founders and Kazakh government own more than 55 percent of the miner's stock. (Reporting by Clara Ferreira-Marques; Editing by Andrew Callus and Mark Potter) Link this Share this Digg this Email Reprints

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