Dutch court rejects Glencore bid to buy back logistics unit at discount
Glencore’s Attempted Buyback and Court Decision
(Clarifies number in paragraph 7 is enterprise value)
By Pratima Desai
Background of the Case
LONDON, July 14 (Reuters) - A Dutch court has rejected Glencore’s attempt to buy back its former logistics unit Access World Group through a private transfer to a subsidiary, after opponents said the proposed price undervalued the business.
In an Amsterdam District Court ruling on July 2, released last week, the court said that London-listed Glencore could not transfer Access World shares to its subsidiary Tironimus. The hearing was held on May 21.
Court’s Reasoning and Ruling
Glencore had not demonstrated that a public auction would be harmful, the court said. It added that Tironimus could participate as a bidder in a public auction that might also identify other interested buyers.
Glencore had sought court authorisation under Dutch law for a private sale of the shares to Tironimus.
But the proposed transfer to Tironimus created a genuine risk of a conflict of interest, the court said.
It refused the request, citing concerns over the earlier sale process and the valuation underpinning the proposed transaction, as well as the risk of a conflict of interest.
Glencore declined to comment.
Valuation and Sale Process Concerns
Details of Access World’s Sale
VALUATION QUESTIONED
Current owner Global Capital Merchants Limited, based in the British Virgin Islands, bought Access World from Glencore in 2022 for an enterprise value of $176.7 million.
Glencore originally provided GCM with a $100 million vendor loan to help finance the acquisition, which was subsequently increased to $140 million.
Issues with Sale Transparency and Repayment
That sale process was insufficient to show the market would not pay more because the company had not fully disclosed the process and the pool of bidders appeared restricted, the court said.
GCM failed to make a repayment due in January 2023. By March 31, 2026, the total outstanding amount was about $108.9 million, including about $20.3 million in interest, according to the court document.
Valuation Discrepancies
The court further questioned the valuation underpinning the proposed sale.
Glencore's valuer, Vantage Valuation, put the equity value at $51.4 million, according to two sources.
GCM could not be reached for comment.
(Reporting by Pratima Desai; Editing by Susan Fenton)
