Deals wrap: Glencore debuts while markets await LinkedIn

May 19, 2011

Commodities trader Glencore made a steady market debut with shares trading just above the widely expected launch price of 530 pence, giving it solid currency for potential acquisitions.

There was heavy interest in the stock on both the London and Hong Kong exchanges, due in part to the relatively small amount of shares being sold. Glencore’s Chief Executive and largest shareholder Ivan Glasenberg said demand for the shares “significantly” exceeded the amount available.

Analysts on Thursday said the 530 pence per share level was realistic and should mean strong aftermarket support. “Obviously everything is priced to do well. I don’t know whether five to ten percent upside is in the bag or not, but certainly they are trying to please investors with the price,” analyst Tim Dudley at Collins Stewart said.

In other news, internet companies that expect to go public in the future are eagerly awaiting market reaction to LinkedIn’s debut. The professional networking site sold shares at the top of an already raised price range in its initial public offering on Wednesday, signaling that stock investors are eager to buy shares of social networking companies even if valuations are lofty.

Although companies like Facebook, Groupon, Twitter and Zynga have significantly different business models than LinkedIn, they each tap social networks and the valuations for each are skyrocketing.

According to data provider Capital IQ and posted on the amount of money LinkedIn is raising makes it the fifth-biggest-ever U.S. internet IPO, but still well off Google’s 2004 IPO that raised $1.67 billion.

Yesterday we told you that Takeda Pharmaceutical was on the verge of acquiring privately held Swiss rival Nycomed.

The $13.6 billion deal became official giving Takeda access to a newly approved lung-disease drug, which is expected to be a major source of revenue growth.

The deal marks the biggest overseas purchase by a Japanese company since Japan Tobacco paid $19 billion for Britain’s Gallaher and is Takeda’s second major deal after acquiring U.S. cancer specialist Millennium Pharmaceuticals for $8.8 billion in 2008.


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