The soap opera surrounding ENRC continued last week when the company announced that it notified authorities that there were two incidents of potential loss of data. The Independent Committee of the Board of ENRC also released the details of the low-priced takeover by the three founding members of ENRC and their supporters. The bid was valued at ￡2.60 per share and consists ￡1.75 per share in cash (having an aggregate value of approximately $1.6-billion) and 0.231 of an existing Kazakhmys share for each ENRC share. At the time the proposal was presented on May 16, it referenced a Kazakhmys share price as of May 13, 2013 of ￡3.70 per share.

 

Financial analysts are predicting three possible outcomes of the proposed buyout of shareholders. They are: The company’s board gives approval for the takeover on slightly improved terms; the board refuses to do the deal and the consortium goes hostile but the deal goes through because of the consortium’s control of the super majority of the shares; or the board refuses to approve the deal and the consortium walks away, leaving a huge mess.

 

The key could be the Kazakhstan government. “The ENRC mess has made it difficult for any Kazakh company to get any respect in the Western financial markets,” one analyst pointed out. “Everything in Kazakhstan is being tarred by ENRC.”