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(Upadates with company's statement)
By Clara Denina
LONDON, Nov 9 (Reuters) - KAZ Minerals' fifth
biggest investor says it plans to vote against a 3 billion pound
($3.94 billion) take-private plan orchestrated by the company's
chairman, Oleg Novachuk, because it undervalues it.
A consortium, led by Novachuk and KAZ director Vladimir Kim,
last month offered 640 pence for the 61% of the mining company's
shares it doesn't already own to take it private.
The all-cash deal would offer minority shareholders a 12%
premium on the previous day's close. Acquisitions involving
copper assets bear a premium of at least 15%, analysts say.
"We are deeply underwhelmed by the offer, as we believe it
materially undervalues the company's existing and future
projects and, under current conditions, we will look to vote
against the proposal in order to preserve shareholders'
interests," James Johnstone, co-head of the RWC Emerging and
Frontier Markets team, said in a written statement.
RWC Partners, which runs $9 billion in emerging and frontier
markets, owns just under 3.3% of KAZ Minerals.
"Following extensive negotiations, the Independent Committee
of KAZ Minerals intends to unanimously recommend the acquisition
to KAZ Minerals shareholders as it represents an opportunity to
realise their investment at a premium in cash in the near term,"
said Michael Lynch-Bell, senior independent director and chair
of the independent committee.
KAZ is the largest copper producer in Kazakhstan. Copper is
used make motors, batteries, wiring and other goods as it is one
of the best electrical conductors. Electric vehicles are seen as
a major growth area for the metal over the next decade.
KAZ's share price had gained 18% so far this year before it
was locked by the offer. It skyrocketed by 240% within three
years of listing in 2005, but currently trades at about the same
price as when it first listed.
The global X Copper Miners exchange-traded fund,
which tracks the main producers of the metal, including Canada's
First Quantum and Ivanhoe and London-listed
Antofagasta, has also risen by 18% so far this year.
The consortium believes KAZ's long-term interests are best
served as a private company, due to the company's capital
intensive strategy.
It also said the development of the Baimskaya copper mine,
bought in 2018 and needing a $7 billion investment, in east
Russia would "be best undertaken away from public markets".
Immediately after KAZ Minerals announced its acquisition of
Baimskaya in 2018, its share price plunged because of investor
concerns about Russian risk, even though Baimskaya is regarded
as one of the world's most significant underdeveloped copper
prospects.
The take-private deal is subject to court approval and a
shareholder vote in December or early January. It would be put
in doubt if does not reach the approval of 75% of shareholders
by value - excluding Novachuk and Kim, who will not vote.
($1 = 0.7592 pounds)
(Reporting by Clara Denina; additional reporting by Helen Reid
in Johannesburg. Editing by Barbara Lewis)
