Glencore Chief Executive Ivan Glasenberg could be worth $10 billion after the commodities trader makes its debut later this month in a record public offering valuing the commodities group at some $60 billion.
Glasenberg, a publicity-shy former coal trader, was known to hold the largest slice of Glencore, but his precise holding and corresponding paper wealth was unclear until Wednesday's bumper 1,637-page prospectus detailed his stake of 18.1 percent.
The 54-year-old's stake will drop to 15.8 percent after the IPO, but he will remain the largest holder with a paper fortune that will propel him into the ranks of the world's richest.
Other top shareholders include Daniel Mate, 47, and Telis Mistakidis, 49, the co-directors responsible for zinc, copper and lead. They each own 6.9 percent before the IPO, falling to 6 percent after the offering.
Glencore, the world's largest diversified commodities trader, is seeking a strong debut for the share offering, capping planned proceeds at $11 billion and placing a third of that with key investors led by Abu Dhabi, it said on Wednesday.
Glencore set a 480 to 580 pence per share price range for the London initial public offering (IPO). That values it at 36.5 billion pounds ($60 billion) at the mid-point, which is below the price some analysts say the company is worth, and was seen as an attempt to leave something on the table.
It's smart for investment bankers to be conservative in their pricing, so as not to disappoint too many people, John McGloin at Collins Stewart said.
But institutional investors may take some convincing.
The key thing Glencore needs to bear in mind is yes, they have an interesting model, but not everyone has bought into the idea of how the business is run, a portfolio manager at a UK investment company said.
To be pricing Glencore over $55 billion is way out of line, I would not buy that.
Another UK equities investment manager added the IPO was priced to go: This is a very strong commercial operation, there's no question about that, the only question is the timing in the cycle, which is uncertain. Nobody knows.
PREPARING FOR DEALS
Glencore, which is planning a dual London and Hong Kong listing, said on Wednesday it was looking to raise gross proceeds -- before fees and other costs -- of around $10 billion. That is before a 10 percent greenshoe or over-allotment option which can be sold if there is demand.
The listing will boost Glencore's firepower for deals amid a boom in commodity prices, but will also push it into the public eye after 37 years as a discreet private company.
Glencore, which has pursued an opportunistic but lucrative acquisition strategy, said in the prospectus it would continue to seek deals to strengthen its core physical marketing activities and also detailed talks to buy a stake in an alumina refinery and manganese mining operations.
But it made no mention in the document of plans for Swiss miner Xstrata in which it has a 34 percent stake and with which it is widely expected to merge. That would put a deal at least months away.
Glencore's estimate of its future market capitalization puts the company just above the mid-point of a wide $45 to $73 billion value implied in its intention-to-float last month. The mid-point of analyst research was around $60 billion, though that excludes proceeds from the offering.
We could have gone out with a much higher price range. (Glencore) knows a sensible price range is needed, a source close to the deal said.
Glencore said it had struck agreements with cornerstone investors, who will take up around 31 percent of the total offer, one of the largest cornerstone books to date. A separate term sheet reveals Abu Dhabi's IPIC Aabar will be the largest cornerstone investor, committing $850 million to the IPO.
Singapore has agreed to invest $400 million and BlackRock Inc $360 million, while other investors include Credit Suisse Private Bank and Och Ziff, have each agreed to buy $175 million worth of shares.
The source close to the deal said the cornerstones were oversubscribed, with not every early investor getting the full allocation they had requested.
Holders of Glencore's 2009 convertible bond, including the Government of Singapore, BlackRock and China's Zijin Mining, will hold 5.5 percent of the post-IPO firm. They will have made a total profit of more than $1 billion in under two years.
Glencore confirmed it is looking to raise around $7.9 billion by selling new shares, while its partners plan to raise about $2.1 billion to pay off a tax bill linked to the IPO.
That would value Glencore at about 8 to 10 times estimated 2011 earnings, based on the average forecast of the three banks underwriting the IPO.
Founded in 1974 by trading sensation Marc Rich, Glencore has until now held on to a fiercely prized tradition of discretion. As a result, investors will scour the prospectus for details ranging from its existing investors to risks and trading.
Remuneration has also been a closely guarded secret. Wednesday's prospectus shows Glasenberg will be paid 925,000 pounds a year, and will be entitled to a bonus of up to twice that amount. Simon Murray will be one of the best-paid FTSE non-executive chairmen with annual fees of 675,000 pounds.
The prospectus also showed the commodities giant's banks will share a potential fee pool of $275 million, the biggest in at least a decade for a European listing.
Citigroup, Credit Suisse and Morgan Stanley are the joint global coordinators for the offer.
In its release on Wednesday, Glencore said it had appointed an extra 14 banks to lower ranking roles, boosting the syndicate disclosed last month and taking the total to 23 institutions.
Conditional trading is set to begin on May 19.
(Additional reporting by Quentin Webb, Sarah Young, Julie Crust and Chris Vellacott in London, Elzio Barreto, Denny Thomas and Fiona Lau in Hong Kong; Editing by Alexander Smith and Mike Nesbit)