Glencore International, the world’s biggest commodity trader, has bought a 51% stake in Chemoil Energy for US$233 million ($325 million) from the Chandran Family Trust.
It paid 35.52 US cents a share: 21.1% discount to the closing price of 45 US cents, on Friday.
In late May this year, just before rumours of Glencore buying a stake appeared, Chemoil was trading at around the 30 US cents level. The rumours pushed it to as high as 56.5 US cents.
Moral of the story: buyer of a controlling block may not need to pay a premium to market. It all depends on its bargaining power vis-a-vis the seller. And whether there is another major shareholder willing to deal: Itochu Corporation, a Japanese conglomerate, with a 37.5% stake in Chemoil, was apparently contented with its stake.