By Quentin Webb and Kylie MacLellan
LONDON (Reuters) - Commodities giant Glencore <GLEN.UL> has lined up one-time BP <BP.L> executive Rodney Chase as chairman as it prepares for a possible $60 billion float, the Sunday Times reported.
Continue Reading Below
The newspaper said, citing sources close to the situation, that Chase had agreed in principle but had not been formally appointed. It said the other final candidate, former trade minister Lord Davies, had turned the offer down.
Chase, who has also been deputy chairman of supermarket group Tesco <TSCO.L> and is the outgoing chairman of oil services firm Petrofac <PFC.L>, spent almost 40 years at BP, where he was instrumental in the creation of Russian venture TNK-BP.
Glencore declined to comment.
However, the Glencore role may not last long, the Times said, as Chief Executive Ivan Glasenberg is keen to merge with Swiss miner Xstrata <XTA.L>, of which Glencore owns 34 percent. Xstrata Chief Executive Mick Davis would then become chairman of the merged group, it said.
A standoff between Glasenberg and Davis -- who has called on JPMorgan's Ian Hannam and Brett Olsher, formerly of Deutsche Bank, for a string of deals -- could force banks to take sides.
But while people familiar with the matter say Glasenberg has weighed a merger with Xstrata as an alternative route to the public markets, the idea has been resisted by Davis and Xstrata investors, who wanted a public valuation of Glencore first.
The listing may also test the much-vaunted client conflicts policy of Goldman Sachs <GS.N>, which helped Anglo American <AAL.L> thwart a bid from Xstrata and is Olsher's new employer.
Conflicts of interest are particularly thorny in mining, which is dominated by a handful of huge, acquisitive companies, and has played host to a string of acrimonious bid battles such as BHP Billiton's tilt at Rio and Xstrata's move on Anglo.
Long-time advisers Citigroup <C.N>, Morgan Stanley <MS.N> and Credit Suisse <CSGN.VX> will be Glencore's lead banks for any initial public offering (IPO), people familiar with the matter say, while a string of rivals are jockeying for secondary roles.
A listing is not yet a certainty. Its size, timing, and value are all open questions. But the stakes are indisputably high: a $10 billion listing, for example, could pay $300 to $400 million in fees, Freeman & Co reckons.
"Global co-ordinators and bookrunners are in a conflict-rich environment, reading board minutes, talking to management, and so on. It would be difficult for one of the senior banks on the Glencore float to turn round and fairly represent Xstrata in any future transaction involving its parent."
Deutsche Bank and JPMorgan are Xstrata's longstanding corporate brokers and have counseled Davis on almost every major deal or fund-raising.
Each has received nearly $240 million since 2000 from Xstrata for advice on bond and share issues, loans, and takeovers, Thomson Reuters data and estimates show, or 33 percent each of total fees. The next bank down claimed 5.7 percent of the fee pool.
Deutsche, JPMorgan, Goldman Sachs and Xstrata declined to comment.
(Additional reporting by Rosalba O'Brien and Julie Crust; Editing by Alexander Smith and Jon Loades-Carter)