Eurasian Natural Resources won’t bid for Kazakhmys

mineral resources

Eurasian Natural Resources won’t bid for Kazakhmys

By SRI ⋅ May 14, 2008 ⋅

Eurasian Natural Resources Corp., the Kazakh producer of ferrochrome and iron ore, won’t bid for rival mining company Kazakhmys Plc, two months after saying it may make an offer.

ENRC decided against bidding “at the current time,” the London-based company said today in a statement, three days before the expiry of a deadline set by the U.K. Takeover Panel to make a “firm” offer or walk away for six months. “An unnecessary distraction” had been resolved, Kazakhmys spokesman Tom Randell said by phone.

A combination would have created a company with assets in central Asia and annual sales of more than $9 billion. Mining companies are eyeing competitors to bolster production as commodities including copper and coal trade close to records. Rio Tinto Group is fending off a $179 billion hostile bid from BHP Billiton Ltd., the world’s largest mining company.

“The market likes it as investors didn’t want to see ENRC overpay because they have got good quality assets and growth prospects already,” John Moorhead, an analyst at Macquarie Bank Ltd. in London who has a share price valuation of 1,450 pence on Kazakhmys, said today by phone.

Kazakhmys dropped in London trading after the announcement, closing 38 pence, or 2.1 percent, lower at 1,735 pence, valuing the company at 7.9 billion pounds ($15.2 billion). ENRC closed 3.1 percent higher at 1,377 pence.

By Brett Foley (Bloomberg)