When Glencore floated on the London Stock Exchange (LSE) in May 2011 for just under $10bn (£6.24bn), it posted the largest capital raising by an international company in London and became the fifth-largest mining-related company on the London bourse.
Although there has been some scepticism over the final listing price, it showed a great deal of confidence in the commodity trading giant, which started life in a Swiss apartment block.
Although Glencore’s flotation was a highlight in last year’s IPO calendar, a number of other energy and natural resources companies have listed on the LSE in the past few years. The Lawyer consulted data from Thomson Reuters for all UK-listed IPOs in the energy and power and materials sector since 2009. After a disappointing 2009, when only three energy companies floated, 17 listed in 2010, 19 listed in 2011 and four had already floated by the end of March this year.
Clifford Chance and Linklaters landed leading roles on the Glencore IPO, with Linklaters advising the commodity titan while Clifford Chance acted for Morgan Stanley, Citigroup and Credit Suisse as lead arrangers.
Freshfields Bruckhaus Deringer has also advised on several big-ticket IPOs, having advised Essar Energy when it floated on the LSE for £1.3bn in April 2010 and Polymetal Energy on its £490.2m IPO in October 2011. Linklaters advised the banks on the Essar IPO and Clifford Chance advised the banks on Polymetal’s IPO.
Clifford Chance also bagged key roles on four other IPOs, taking the lead in AZ Electronic Materials’ flotation for £440.69m in October 2010, with Freshfields advising the banks. It also advised PhosAgro on its £243m IPO in July 2011, with Linklaters advising the banks on this occasion.
The firm acted for the banks in Jubilant Energy’s £33.71m IPO in November 2010 and, most recently, for RusPetro on its £169m IPO in January 2012.
Away from the magic circle, several other firms were retained for key listings in the past three years, and US firms also got in on the act, with Davies Ward Phillips & Vineberg and Shearman & Sterling advising African Barrick Gold on its £539.1m IPO in March 2010. Linklaters advised the banks.
Although the data for 23 of the AIM listings in the energy sector is incomplete, a number of firms crop up on several occasions. Take Field Fisher Waterhouse (FFW), which advised the banks on Kea Petroleum’s £5.9m AIM flotation in February 2010, with Fasken Martineau acting for Kea.
The following year FFW acted for Trap Oil Group on its £60.5m AIM flotation, which was one of the largest AIM IPO fundraisings of 2011.
When Central Asia Metals looked to list on AIM it turned to Ashurst, Macleod Dixon and Mongolian outfit Tsets Law Firm for advice, finally listing in September 2010
for £37.5m. FFW advised KPMG Corporate Finance and Mirabaud Securities on the flotation.
Ashurst and Macleod Dixon were also later retained to advise Bayfield Energy Holdings on its AIM flotation for £54.1m in December 2011, with Nabarro advising the banks. Ashurst also took the lead on Jubilant Energy’s IPO.
Investing in an IPO and at what price is a big decision, but when Glencore announced its plans to float it was inundated with offers from excited investors. While some sceptics failed to subscribe to the hype, at the offer price of 530p Glencore succeeded in gaining a market value of some £36.7bn.
In August 2011, when its share price slipped by 35 per cent, the sceptics came out of their shells once again.
But Glencore’s potential merger with Xstrata, which is valued at £88bn, may have quelled the worries of the doubting Thomases over what Glencore’s business is really worth.
Top five IPOs in past three years
- In May 2011 Linklaters advised Glencore on its £6.24bn IPO, while Clifford Chance acted for the banks
- In April 2010 Freshfields Bruckhaus Deringer advised Essar on its £1.3bn IPO. Linklaters advised the banks
- In March 2010 Davies Ward Phillips & Vineberg and Shearman & Sterling advised African Barrick Gold on its £543.2m IPO. Linklaters advised the banks
- In October 2011 Freshfields advised Polymetal Energy on its £490.2m IPO. Clifford Chance advised the banks
- In October 2010 Clifford Chance acted on AZ Electronic Materials’ £440.7m IPO. Freshfields advised the banks