(Adds quotes, details on offer throughout)
By Clara Ferreira-Marques and Megan Davies
LONDON/MOSCOW, May 31 (Reuters) - The three billionairefounders behind miner ENRC have asked its independentboard members for a three-week extension to a June 3 buyout biddeadline, seeking more time to iron out technical details,sources with knowledge of the matter said.
ENRC's founders said in April they were weighing up a buyoutof minority investors in the mining group - a move that wouldtake the company private and end a London adventure marked bybitter boardroom battles, corruption probes and an acquisitionspree that left it with $5 billion of debt.
The trio - Alexander Machkevitch, Alijan Ibragimov andPathokh Chodiev - also enlisted the support of the Kazakhgovernment, a key investor in ENRC and London-listed coppermining rival Kazakhmys. Together, the bidding consortiumholds around 54 percent of ENRC shares.
ENRC's independent directors, however, earlier this monthrejected an initial, tentative offer - a buyout proposal in cashplus the government's shares in Kazakhmys that would value ENRCat around $5 billion. Instead, the board gave the trio untilJune 3 to come up with an improved bid or walk away.
But technical complications, including delays as shares aretransferred from individuals to the bidding consortium, forcedthe trio and the Kazakh government to ask for more time.
"(The suitors) have contacted the (ENRC) board. What theanswer will be is not certain, but if there is no extension,there can be no bid," one of the sources said.
A separate source added: "It would be madness for the boardnot to give enough time for a fully considered offer to be puttogether."
The board had already been asked for more time when a firstextension was granted to June 3, but gave only 14 days.
"They always said 14 days was not going to be enough," thesecond source said.
NO INCREASE?
The sources said the delay was technical and not linked toissues around financing, with the cash element of the bid set tobe secured by loans from Russian banks that are already majorlenders to ENRC.
But two of the sources said a major increase in the proposalmade earlier this month was not on the cards. That proposal, pershare, had been worth 175 pence in cash plus 0.231 of aKazakhmys share, or a total of just under 251 pence per ENRCshare at Friday's Kazakhmys closing price.
ENRC's share price on Friday closed at just under 240 pence,indicating little expectation of an increase.
At those levels, the bidders may not get a full endorsementfrom the independent committee of ENRC's board, though that maybe less than crucial for a company in which less than 20 percentof the shares are freely traded.
The price, two sources said, was a function of a financingstructure designed not to leave ENRC or the bidders unable tosustain the debt load, making it closer to a leveraged privateequity deal than an industrial conglomerate buying control.
The first source said the bidders would not bid againstthemselves in a situation where no rivals are likely to appear,for the sake of the independent board directors.
"The problem is that even if you increase it (10 or 20percent), they'd still say no," the source said.
More critical will be the support of top shareholder, rivaland kingmaker Kazakhmys, which owns a 26 percent stake in ENRC,and of Kazakhmys investors - which will ultimately have to voteto support or reject the company's position on the ENRC deal.
Sources familiar with the matter have indicated Kazakhmyswould like an improved cash component, but is happy with thestructure of the current proposal.
Even at current levels, the bid allows Kazakhmys to riditself of a stake in ENRC in exchange for $890 million in cashand 77 million of its own shares.
"For Kazakhmys ... they get a cleaner shareholder register,don't have government involvement, have cash to pay down theirdebt - all those things for their own story are quite good," thethird source said.
"That gets you over 75 percent, which means you can delistthe stock. How many people want to stay in a delisted privateKazakhstan entity? I don't know, but I would assume it's arelatively small number."
The bidding consortium, ENRC, the independent committee ofthe board of ENRC and Kazakhmys declined to comment. (Reporting by Clara Ferreira-Marques and Megan Davies; Editingby Andrew Callus and Dale Hudson)
