The Rainmaker is back and says GlenTinto merger ‘all-but-inevitable’

POSTED ON November 24, 2014 BY Travis McPherson
CATEGORY Glencore, Ian Hannam, Rio Tinto, Stories,

- Ian Hannam (Photo: The Times)

Ian Hannam, often referred to as the "The Rainmaker" (also "the King of Mining"), headed up JPMorgan's mining business and has advised on most of the major mining deals over the past 15 years, including the $90 billion merger between Glencore and Xstrata in 2012. Nobody has done more mining deals than Hannam.

Now he is back, after a brief hiatus, and is looking to make a splash.

He runs his own boutique investment bank (aptly named Hannam & Partners) and according to sources, he is trying to revive the mega-merger between Rio Tinto and Glencore.

According to reports, the former Captain of the Territorial Army (Hannam) convened with reps from more than 20 different institutional funds in London recently in an attempt to convince them of the merits of a "GlenTinto" mega-merger.

“If not today, this deal will happen sometime in the near future,” Hannam said in his presentation, according to a printed transcript that was seen by Bloomberg. “Glencore is M&A savvy and times deals well. The combination will create a super-major with a diversified portfolio of world-class mining assets.”

The fund managers in attendance included GLG Partners and DE Shaw & Co which each manage over $34 billion in assets globally.

“Rio’s shareholders will demand a material premium,” the presentation reads, under a subheading entitled “Headwinds.” Glencore's high debt levels and antitrust roadblocks were also mentioned as potential hurdles.

The immediate synergistic benefits of the merger were estimated at $1.8 billion which Hannam says will be realized largely as a result of Rio Tinto being able to sell its commodities through Glencore's vast trading arm.

Over his 12 year career at JPMorgan, Hannam not only helped sell Xstrata to Glencore in 2012, but he was part of the original team that incubated Xstrata through to its 2002 IPO.

Hannam was also instrumental (along with Mick Davis) in the 2001 merger between BHP and Billiton. He brought Fresnillo public along with Kazakhmys, the Kazakh copper giant; and the list goes on.

Martin Gilbert, the co-founder of Aberdeen Asset Management (FTSE 100 listed company that manages over $550 billion), has said: "Without Ian Hannam, Aberdeen Asset Management would not have survived its 2002-2004 downturn and would not be a FTSE 100 company today."

Hannam's commitment to the deal is renowned.

Although most of the literature regarding Hannam is positive, especially when it comes from the people he does business with, he was fined over $700,000 by the UK regulators for "market abuse" in 2012 surrounding a controversy with Heritage Oil. After that he stepped down from his position at JPMorgan.

With Ivan Glasenberg, one of the most accomplished deal men around, and Ian Hannam both trying to get Glencore and Rio Tinto together, I tend to agree with Hannam that the deal is 'all-but-inevitable'.

Hannam's firm says they are not advising Glencore or Rio Tinto on this possible transaction.

Read: Glencore-Rio Merger Will Happen, Hannam Tells Hedge Funds

Travis McPherson

trav@ceo.ca

Travis McPherson

trav@ceo.ca

Disclaimer:

Readers are advised that the material contained herein is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice. Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities. The information contained herein is based on sources which the publisher believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available data. Any opinions expressed are subject to change without notice. The owner, editor, writer and publisher and their associates are not responsible for errors or omissions. They may from time to time have a position in the securities of the companies mentioned herein, and may change their positions without notice. (Any significant positions will be disclosed explicitly. This article is not intended to meet your specific individual investment needs and it is not tailored to your personal financial situation. Nothing contained herein constitutes, is intended, or deemed to be — either implied or otherwise — investment advice. Thomas Humphreys, Pacific Website Company Inc., and other entities in which he has an interest, employees, officers, family, and associates may from time to time have positions in the securities or commodities covered in these publications or web site. We reserve the right to buy and sell such securities or commodities without notice to readers. While the information herein is believed to be accurate and reliable it is not guaranteed or implied to be so. The information herein may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. Neither Thomas Humphreys, nor anyone else, accepts any responsibility, or assumes any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information in these publications or web site.

Forward-Looking Statements: This article may include certain "forward-looking information" within the meaning of Canadian securities legislation. Forward-looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "forecast", "expect", "potential", "project", "target", "schedule", budget" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the potential of the Company's properties are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on a number of material factors and assumptions. Important factors that could cause actual results to differ materially from Company's expectations include actual exploration results, changes in project parameters as plans continue to be refined, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, delays or inability to receive required approvals, and other exploration or other risks detailed herein and from time to time in the filings made by the Company with securities regulators. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward-looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward-looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date of this article. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Always do your own due diligence. We seek safe harbor.