Commodities trader Glencore
Shares in the world's largest diversified commodity trader dropped 2 percent as weaker-than-expected results from its metals and mining trading unit held back its operating profit.
Kazakh miner ENRC, with a free float of less than 20 percent, has long been seen as a potential target for Glencore.
Industry sources say Glencore could be tempted by its undervalued assets and a heavy fall in the shares as a result of a boardroom spat over its leadership that has seen the departure of two independent directors.
Glencore monitors a wide range of opportunities in the sector and will continue to do so, Chief Executive Ivan Glasenberg told reporters following the company's results.
However, we can confirm that although we talk to a lot of people in the sector, we are not actively considering a bid for ENRC, he added.
Shares in ENRC jumped almost 8 percent on Monday after a newspaper report said Glencore had held talks with its trio of founder shareholders, and was pondering a takeover.
ENRC shares, which trade at a hefty 15 percent discount to the sector, were down 2.4 percent at 758 pence at 0818 GMT (4:18 a.m. ET).
A source familiar with the matter confirmed on Tuesday that ENRC's general counsel, Randal Barker, has also left the firm.
Glencore's opportunistic approach to acquisitions has made its fortune and that of top shareholders including Glasenberg. He said the company would continue to take the same view, with little appetite for hostile deals.
Glasenberg, a former coal trader, reiterated a deal with rival Xstrata
Glencore, the world's largest diversified commodities trader, said in its first quarterly report since its May listing that operating profit jumped 45 percent in the first three months, as market volatility boosted its marketing arm and said it saw demand for commodities remaining healthy.
But a drop in the marketing division of its metals and minerals division, hit by the Japanese earthquake and tsunami and fewer arbitrage opportunities, dampened its headline number, taking its shares down 1.9 percent to 513.7 pence.
That is well below its initial offering price of 530 pence.
Adjusted earnings before interest and tax (EBIT) rose to $1.8 billion from $1.2 billion in the year-earlier period. Deutsche Bank analysts had forecast an adjusted operating profit (EBIT) of $1.94 billion for the first quarter, with a 45 percent contribution from the metals and minerals division.
The earnings were 6 percent below our expectations and that was mainly driven by a slightly disappointing number in the marketing business, Nomura analyst Paul Cliff said.
Its energy products division's marketing side, however, almost doubled.
They are a reasonable set of results, analyst Cailey Barker at Numis said. The only real thing to read from it was the outlook. They felt quite positive about the outlook with the underlying fundamentals despite the choppy markets and the volatile prices.
Barker added: We are not surprised at them saying they are not going to bid for ENRC. It would be quite a chunk for them to chew at this stage and it would potentially complicate matters with Xstrata as well.
First quarter net profit rose 47 percent to $1.3 billion as revenues grew 39 percent.
Most of the top diversified mining companies have reported a tough start to 2011, as floods and heavy rains hampered output in Australia, South Africa, Zambia and Columbia.
(Additional reporting by Julie Crust; Editing by Alexander Smith)