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The London Stock Exchange could see one of its biggest ever flotations after it emerged that the giant Glencore commodities house is looking to come to market.
A float would value it at a similar level to those of the FTSE 100's giant mining companies, which are worth tens of billions of pounds.
However, analysts are already speculating that if Glencore is to go public it could do so via a merger with London-quoted Xstrata, the global mining giant of which it owns 35%.
Notoriously secretive Glencore is one of the world's largest privately owned companies.
A Swiss-based firm, like Xstrata, it is a producer and trader in the metals, mining, oil and gas and agricultural commodities markets.
It has made multimillionaires of scores of London traders during the commodities boom, and last year had profits of $4.4 billion (£2.7 billion) on revenues of $152 billion.
However, a move to public life would not come without controversy. Operating in some of the most politically unstable regions in the world, it has been routinely associated with trading with rogue states.
Its billionaire founder Marc Rich — Glencore used to be called Marc Rich & Co, and his associates continue to run the firm —was a fugitive from justice over tax evasion in the US for years until being pardoned on the final day of the presidency of Bill Clinton.
But according to private briefings from
the company, it has been that secrecy that
is prompting Glencore to consider going public.
During the commodities crash last year, the cost of insuring the firm's debt mountain from going into default spiralled because of a lack of information about the company in the credit markets. Charles Kernot at stockbroker Evolution Securities says if Glencore floats with a separate stock-market listing, there could be conflicts of interest over its significant holding in Xstrata, which has already been an issue for independent shareholders in Xstrata's £4 billion rights issue this year.
“We believe a Glencore-Xstrata get-together makes more sense than a separate Glencore initial public offering,” he said.
“Much better, we think, for Glencore and Xstrata to merge and thereby consolidate their position through cutting the overlaps that exist between the two groups.
“This would undoubtedly create the size and scale for Mick Davis, Xstrata's chief executive, to further his ambitions in the sector.”
A spokesman for Glencore declined to comment. Analysts said publicly tradable shares in Glencore would crystallise the paper fortunes of many of its senior employees.
