Citigroup Global Markets Inc. has been flagged in filings on the London Stock Exchange as having a connection to Glencore Plc regarding a potential transaction with Rio Tinto, and two people familiar with the discussions said Citi is close to being appointed as Glencore's lead investment bank on a prospective takeover.
The disclosures were lodged with the UK Takeover Panel in January, identifying Citigroup as linked to Glencore in relation to a possible deal with Rio Tinto. Both the bank and Glencore declined to comment.
Those familiar with the situation said Citi has an established advisory relationship with Glencore, having worked on several of the miner-trader's major transactions in the past. That history includes advising on Glencore's 2011 initial public offering and more recently on its acquisition of Teck Resources' coal business.
Market participants have broadly expected Rio Tinto and Glencore - which on January 8 confirmed they were in early merger talks - might seek to extend the statutory window for a bidder to firm up an offer, given the potential transaction's scale and complexity. Under UK takeover rules, an identified potential bidder has 28 days to either announce a firm intention to make an offer or to cease the approach. The current 28-day period expires on February 5, though an extension can be sought by the parties.
Other investment banks are actively competing for advisory roles connected to any deal, the sources said, without naming those firms. Rio Tinto has already appointed advisers on its side - JP Morgan, Evercore and Macquarie - according to people aware of that development.
The advisory roles on a transaction of this size are highly prized within investment banking circles because they could generate substantial fees. People familiar with the matter have estimated advisory fees on a deal of this magnitude could exceed $100 million.
Context limitations - The parties involved have limited public comment, and the filings only indicate a connection between Citigroup and Glencore in relation to a possible deal with Rio Tinto. Sources described the near-term status of Citi's engagement and the broader advisory competition, but did not provide formal confirmations or detailed timetables beyond the existing regulatory deadlines.