ENRC Bid deadline extended with hints of a material increase

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Salient point below underlined. Looks like a revised offer towards/possibly north of 300p is on the way given the use of the words ‘material undervaluation’ and ‘expectation’ of a revised bid…

Eurasian Natural Resources Corporation PLC (the “Company” or “ENRC”)

Statement regarding extension of Rule 2.6 deadline

In accordance with Rule 2.6(a) of the City Code on Takeovers and Mergers (the “Code”), the consortium consisting of Mr Chodiev, Mr Ibragimov, Mr Machkevitch, the Committee of the State Property and Privatisation of the Ministry of Finance of the Republic of Kazakhstan (acting on behalf of the Government of the Republic of Kazakhstan) and JSC Sovereign Wealth Fund “Samruk-Kazyna” (together, the “Consortium”) was required, by not later than 5pm today (the “Code Deadline”), to either announce a firm intention to make an offer for ENRC in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer.

The Independent Committee of the Board of ENRC (the “Independent Committee”) has received a request from the Consortium to extend the Code Deadline to 5pm on 24 June 2013 (the “Revised Deadline”). Before agreeing to seek an extension, which the Panel on Takeovers and Mergers (the “Panel”) has now consented to, the Independent Committee asked for, and received, written assurances from all members of the Consortium that the Consortium expects to secure the necessary approvals to be in a position to make an offer for ENRC under Rule 2.7 of the Code by the Revised Deadline.

Notwithstanding the above, there can be no certainty that an offer for ENRC will be made by the Revised Deadline, nor as to the terms on which any offer will be made.

The Chairman of the Independent Committee, Dr Mohsen Khalil, said: “The Independent Committee asked the Panel to grant the extension after receiving written assurances from the Consortium that it has made considerable progress towards making a Rule 2.7 offer for ENRC. This request to the Panel was made by the Independent Committee with the expectation that any revised proposal will have regard to the Independent Committee’s strong view that the initial proposal materially undervalued ENRC.

A further update will be provided as appropriate.

Note 3 of Rule 2.5 of the Code requires the Independent Committee to point out that this statement is being made by it without prior agreement or approval of the Consortium.

Here’s the latest from Kazakhmys too – In the event that a formal proposal is made, the Board will make its decision in the best interests of all Kazakhmys shareholders and any acceptance of a proposal will be subject to the approval of Kazakhmys’ shareholders – this implies that KAZ will in fact be able to vote on the takeover but that of course, given the material divestment of ENRC that this is to the company, it will require a shareholder vote on the sanctioning of this. With the KAZ Govt owning over a quarter of KAZ and Vladimir Kim a similar amount then these 2 will decide whether it goes ahead.

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