In the next week, the seven men who form the independent board of Eurasian Natural Resources will need to make their first significant decision on the mooted takeover of the embattled FTSE 100 miner.

May 17 is the deadline by which a bidding consortium – composed of the ‘trio’ of oligarchs who founded ENRC and the government of Kazakhstan – must table a firm offer for the about 45 per cent of the shares that they do not already own.

This potential takeover offer was announced after the Serious Fraud Office last month announced a criminal investigation into ENRC, which is expected to scrutinise its African minerals deals.

Felix Vulis, chief executive of ENRC, said last week that that ENRC was “co-operating fully” with a Serious Fraud Office criminal investigation, in a statement to investors.

The consortium may need more time to table a firm offer, but should it emerge, the structure employed is likely to be of vital importance for the minority shareholders.

Since the potential bidding consortium already holds 55 per cent of ENRC’s shares, those close to the process believe any offer is unlikely to come at a signficant premium to ENRC’s share price.

“There is nothing to say we are at the bottom” in terms of ENRC’s share price, said one of the people. “You have got to be realistic on price.”

Before the bid was announced, ENRC shares were trading at £2.29. Takeover offers typically offer shareholders a 30 per cent premium to that. ENRC was listed in December 2007 at £5.40.

Analysts at Macquarie echoed concerns about the risk that ENRC shareholders who are not part of the potential bidding consortium would be offered no significant bid premium. They have a 12-month price target of £2.55 on ENRC shares, which closed Friday at £2.93.

“Investors are potentially exposed to a share price collapse in the event that a bid fails to materialise,” said the analysts in a research report published on Friday. “Should a formal offer be forthcoming …the bid premium offered will be limited by prevailing deal dynamics and the leverage the consortium has over minority shareholders.”

However the bid is structured, minority shareholders are likely to receive a price for their shares well below the listing price and much less than ENRC’s share price high of £15.35 in May 2008.

An offer of more than £5 would be a “stunning” result, said one person close to the situation, who added he would be “surprised” if the offer was anywhere near the listing price.

The bidders have various options on how they structure their bid. Some of those close to the situation believe that a bid structured as a takeover offer is the most likely.

The choice of a simple offer would mean that, with the support of Kazakhmys, which owns 26 per cent of ENRC, the bidders would have enough votes to delist the company. In that case, however, those who did not take up the offer would remain shareholders in the de-listed company.

If the consortium believes the independent board would be likely to recommend their bid, they can use a scheme of arrangement to secure ownership of 100 per cent of ENRC shares. This, however, would require the consent of 75 per cent of shareholders outside of the consortium.

If such an approach is taken, the consortium is likely to reserve the right to change the bid back to an offer structure, which would allow them to vote their shares in the decision of whether ENRC gets taken private or not.

In either case, the bidding group is also likely to seek some kind of undertaking from Kazakhmys before announcing a formal bid, one of the people said.

Those close to the process believe Kazakhmys is keen to sell its shares in ENRC and is highly unlikely to join the consortium.

For Kazakhmys, which declined to comment, a majority of its own shareholders will be required to vote on how it responds to the ENRC takeover offer because of the size of Kazakhmys’s stake in ENRC.

Russian politician and businessman Suleiman Kerimov raised his stake in the crisis-hit miner to 3.09 per cent in recent weeks. People familiar with the situation said that the UK takeover watchdog had been informed that Mr Kerimov’s stake was not linked with the consortium. A spokesman for Mr Kerimov was not available for comment. A spokesman for the three founder shareholders declined to comment.

Deutsche Bank, which recently stepped down from its role as broker to ENRC, downgraded its outlook for the miner on Friday, changing its recommendation from buy to hold and removing a price target.

“We value the ENRC assets at $13.8bn or £6.67 per share,” the Deutsche Bank analysts wrote in a note. “Given recent events surrounding the company, it looks unlikely to us that a public shareholder will be able to achieve that value.”

“The key to any bid will clearly depend heavily on the ability to convince Kazakhmys of the terms of the offer. We note that Kazakmys’ recent IMS it wrote down its holding value of its stake in ENRC to an equivalent level of £2.46 per share.”

ENRC and the independent committee of board directors declined to comment.

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