By Divya Rajagopal and Clara Denina
TORONTO, Feb 2 (Reuters) – Swiss miner Glencore is close to engaging Citi as its lead investment bank on its potential acquisition by Rio Tinto that could create the world’s largest miner worth over $200 billion, two people familiar with the matter told Reuters.
Citigroup Global Markets Inc. filed disclosures with the UK Takeover Panel in January, identifying itself as connected with Glencore Plc in relation to a possible deal with Rio Tinto, according to filings made at the London Stock Exchange.
The bank and Glencore declined to comment.
Citi has a long-standing relationship with Glencore, having advised the miner and trader on several major transactions, including its 2011 initial public offering and, more recently, the buyout of Teck Resources’ coal business.
Markets have widely anticipated that Rio Tinto and Glencore, which on January 8 said they were in early merger talks, might seek to extend the current deadline for a possible bid, given the scale and complexity of a potential deal.
Under UK takeover rules, a potential bidder has 28 days from being identified to either announce a firm intention to make an offer or walk away. The current deadline expires on Feb 5, though the parties could request an extension.
Other investment banks are also vying for advisory roles on the deal, the sources said, without naming them.
Rio Tinto appointed JP Morgan, Evercore and Macquarie to advise on the deal, according to people aware of the development, Reuters reported earlier this month.
The advisory roles on a deal of this magnitude are highly coveted as bankers jostle for a share of potentially more than $100 million in advisory fees.
(Reporting by Divya Rajagopal in Toronto and Clara Denina in London; Editing by Emelia Sithole-Matarise)
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