REGIONAL— The international commodities trader Glencore may soon assume full ownership of PolyMet Mining, for about $73 million in cash. The massive Swiss-based company, which has faced a raft of criminal charges in recent years for its aggressive tactics in acquiring mineral assets, had already controlled about 82 percent of PolyMet’s stock.
Under their latest tender offer, Glencore will pay $2.11 a share for the remaining 17.8 percent of PolyMet stock. A special committee of PolyMet’s board of directors unanimously approved the offer, according to an announcement made Monday. Approval by the full board is expected at a later date.
The offer was well above the value pegged in recent market trading for PolyMet stock, which had been selling for a rock bottom 79-cents a share as of June 30. Glencore’s offer sent the stock sharply higher. It was trading at $2.08 per share as of Tuesday of this week.
Final approval of the acquisition won’t happen immediately. According to a press statement issued by PolyMet, the agreement will be fully consummated upon satisfaction of board and shareholder approval, court approval, and certain customary closing conditions. “The transaction is expected to close shortly after the shareholder meeting, which is expected to occur in the late third quarter or early fourth quarter, stated the announcement.
Glencore’s decision to acquire PolyMet in its entirety comes as the proposed copper-nickel mining venture is facing major challenges, including the recent withdrawal of its Section 404 wetlands permit by the U.S. Army Corps of Engineers. The company had appeared all but ready to go in 2018, with most of its major permits in hand, but successful legal challenges by environmental groups and the Fond du Lac Band have left most of its permits, including its state-issued permit to mine, in legal limbo.
Among the criticisms leveled against state and federal regulators is that the permits they issued did not name Glencore as a responsible party, despite the company’s majority ownership of the mining venture. That criticism is almost certain to intensify assuming PolyMet becomes a wholly-owned subsidiary of Glencore.