leadf
logo-loader

Is Glencore ripe for an MBO? An investment bank has run the numbers

“Even if this is unobtainable, we think risk-reward is now favourable,” RBC said as it upgraded its recommendation to “outperform” with a price target of £2.40

big mining dump truck

RBC Capital has assessed the potential of a management buyout of Glencore PLC (LON:GLEN), the miner and commodity trading house.

While there has been a revival in the share price since the post-lockdown low of around £1.12, the valuation is still way off its 2018 peak when it was above £4 a share.

The Canadian investment bank believes a consortium could afford to pay £2.80 a share (almost £1 more than the current price) and still deliver a 10% annual return.

“Even if this is unobtainable, we think risk-reward is now favourable,” RBC said as it upgraded its recommendation to “outperform” with a price target of £2.40.

The shares were up 2.7% mid-morning at £1.86, giving it a market capitalisation of just over £24bn.

Headquartered in Baar, Switzerland, the company as it exists today was formed via the 2015 merger of Glencore and Xstrata.

It specialises in mining and trading zinc and copper, generating revenues of £215bn last year.

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Thor Mining latest sampling shows 'gold in the pan' for 'potential...

Thor Mining PLC's (LON:THR) Mick Billing talks to Proactive London about the latest sampling at the Pilbara Goldfield tenements project, in Western Australia. Billing explains the results show gold in stream sediments, with thirteen of 54 stream sediment sites confirmed the presence of...

12 minutes ago

2 min read