Glencore may sell bigger stake

LONDON, U.K. (Reuters) — Glencore is in talks to sell a further 9.9 percent stake in its agricultural unit, say two sources with knowledge of the matter.

The company is said to be negotiating with bidders who missed out on the 40 percent sold to Canada Pension Plan Investment Board.

Bidders include a different Canadian pension fund, state-backed Saudi Agricultural and Livestock Investment Co. and Qatar’s sovereign wealth fund, the sources said.

The CPPIB agreed last month to buy a 40 percent stake in the unit, which includes Viterra, for $2.5 billion, placing the equity value of the business at $6.25 billion.

The unit is valued at closer to $10 billion when inventories and debt are included.

The 9.9 percent stake is valued at around $625 million.

Glencore had been aiming to close the deals at the same time in the second half of 2016, the sources said.

“Negotiations are ongoing,” one said. “People who lost out are still trying to get on board, but Glencore will struggle to get more money for it.”

The company announced its intention to sell a minority stake in its agricultural unit in September, after shareholder pressure to see it cut debt prompted a slew of measures including asset sales, reducing capital expenditure and suspending dividend payments.



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