After boardroom carnage, bid rumours emerge for Eurasian Natural Resources.
Things haven't been quiet of late at Eurasian Natural Resources Corporation (LSE: ENRC), the Kazakh mining operator which floated on the London Stock Exchange in a blaze of expectation back in 2007.
After a bitter boardroom feud, shareholders last week voted to kick out four of the company's directors, including senior independent director Sir Richard Sykes and fellow non-executive director Dr Kenneth Olisa.
More than 80% of shareholder votes went against the reappointment of Sir Richard, in a fall-out that was ostensibly about the company's recent purchase of a licence to mine copper in the Democratic Republic of Congo, but which stems from a long-simmering dispute about corporate governance.
Majority owned
Independent shareholders are in a small minority -- the free float accounts for less than 20% of the shares, with the bulk being held by the three founders, the Kazakh government, and by Kazakhmys (LSE: KAZ), another miner part-owned by the Kazakh government.
Observers have voiced concerns that the company is being run using "Soviet" methods rather than in proper City of London style, and the fallout has been hurting the share price, which has dropped by around 30% since January.
But that was partly reversed on Monday by rumours of a takeover approach from newly floated commodities trader Glencore (LSE: GLEN), which saw the price boosted by 5%.
The word is that a £12bn bid is on the cards, which is a significant premium on the company's pre-rumour market capitalization of around £9.5bn -- and the gossip-mongers reckon that Glencore has already been in talks with the ENRC oligarchs.
Is it likely?
How likely is it to be true? Glencore has made it clear that it plans to go for a strategy of growth by acquisition, and the depressed ENRC share price could make for a very tasty target which would fit in well with its operations.
With confidence in the value of ENRC's London listing being so low, some were suggesting a solution might be for the major shareholders to take the company private again, but a takeover could be a better way out for its founders.
Counting against the possibility, though, is Glencore's restriction on issuing new shares for six months after its LSE listing, as there would most likely need to be some share component to any bid -- whether there is any way round that is an open question.
Whether the bid emerges or not, some resolution to the current unseemly situation at ENRC would surely be in everyone's interests.
Do you own shares? Let us know what you think, below.
More from Alan Oscroft:
The Motley Fool Self Select Stocks & Shares ISA
Invest up to £10,680 per tax year in any of our ISA eligible investments,
with any profits made on your investments free from Capital Gains Tax.*
Our Self Select Stocks & Shares ISA enables you to benefit from all great features
of The Motley Fool Share Dealing Account. You can buy shares in seven
of the world's largest markets with our fully comprehensive dealing account.
Click here to find out more or to open an account
The value of your investments and the income from them can go down as well as up.
You may not get back the full amount you have invested. *Tax laws may be liable to change.
