AustralianSuper said on Wednesday that a secondary listing by Glencore on the Australian Securities Exchange would be a positive development for both the commodities trader and miner and for the ASX itself.
Speaking at the Australian Financial Review mining summit in Perth, AustralianSuper portfolio manager Luke Smith said: "If they were to list here we think it would be positive for Glencore and for the Australian stock exchange." He argued the move would suit Glencore because "we believe the Australian share market is the best and most informed mining share market in the world," and that being listed locally could give the company’s shares a better chance to reflect their true worth.
Smith said the fund had discussed the possibility with Glencore and that a listing on the ASX would provide more options for investors such as AustralianSuper. The comments come against a backdrop in which Glencore has said it is open to considering a secondary listing in Australia.
The topic of Glencore’s Australian listing is occurring in the wider context of past merger talks. Earlier this year Glencore and Rio Tinto explored a potential merger that would have created a combined business with a reported size of $240 billion, but Rio Tinto ultimately walked away, saying it could not see sufficient cost advantages in the deal. The possibility remains a point of market speculation, with some observers suggesting Glencore may still have an interest in a tie-up.
Executives including Glencore CEO Gary Nagle have argued that the industry would benefit from larger-scale consolidation in order to increase relevance, influence and to attract a broader investor base. Smith said AustralianSuper remains cautious about scale for scales’ sake, noting that even a much larger miner "is still not going to be anywhere near the major tech companies."
On the subject of mergers and acquisitions more broadly, Smith reiterated the fund’s disciplined approach: "We always approach cautiously, M&A, and if we can see it’s going to create value, we’ll be open-minded about it." He stressed that the fund evaluates deals with a medium-term horizon, avoiding a focus solely on short-term uplifts in share price.
BlackRock portfolio manager Olivia Markham was also cited at the summit, saying she saw merit in "sensible" M&A as a way for miners to achieve scale and to draw in generalist investors capable of financing large, complex projects.
On the theme of long-term value, Smith noted AustralianSuper’s pragmatic record on transactions: "Australian Super has got a bit of a track record of sometimes saying yes and sometimes saying no, but it’s all about not looking just to this transaction and instant gratification of maybe a share price rise of 20% or 30%." He added: "We’re always looking for three to five years. What is the company’s ... intrinsic worth in three to five years’ time? And is this appropriate price being paid today?"
Market moves referenced in the discussion included notable price action for related securities: ASX was indicated as down 8.8%, Rio Tinto up 1.94% and Glencore up 2.88% on the quotes cited at the event.
In sum, AustralianSuper framed a potential Glencore secondary listing in Australia as broadly constructive - offering improved alignment between share price and intrinsic value and widening investor choice - while underscoring the fund’s cautious, value-focused approach to large-scale corporate transactions.