Shares in the commodities trading and mining giant Glencore show no sign of settling down and a huge jump for the company helped the FTSE 100 to its best day in over a month.
The FTSE 100 just closed in London up 2.57%, or 157.75 points at 6,287.73.FTSEglenGoogle Finance
The big jump was pretty much all down to Glencore, which ended trade on Monday up a crazy 21.04% at 114.99p. The rise helped other mining companies bounce too.
The craziness began in Hong Kong, where shares in Glencore jumped as much as 70% on Monday after reports over the weekend that the company's management would listen to takeover offers.
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The Telegraph reported on Saturday that Glencore "would listen to offers for a takeover of the entire company but its management does not believe there are any buyers willing to pay a fair value for the business in the current market."
Even though it's far from a concrete offer and it sounds as if management is pretty dismissive at the moment, it's enough to get speculators excited.
Glencore's main shares are listed in London, and there they opened up by as much as 20% on Monday.
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Glencore quickly moved to put a halt to all this takeover chatter. The company put out a statement in Hong Kong, also issued in London, saying (emphasis ours):
The board of directors ("Directors") (the "Board") of Glencore plc (the "Company") has noted today's increases in the price and trading volume of the shares of the Company. Having made such enquiry with respect to the Company as is reasonable in the circumstances, the Board confirms that it is not aware of any reasons for these price and volume movements or of any information which must be announced to avoid a false market in the Company's securities or of any inside information that needs to be disclosed under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
So, a big fuss over nothing according to Glencore.
Shares pulled back to around a 6% gain but began rallying again around lunchtime. Trading has been halted twice because of excessive volatility. The rise corresponded with a recovery for copper prices, a key metric Glencore's fate is linked to.
Glencore shares have been going crazy over the past week, and the feeling in the City is that Glencore is definitely "in play" — vulnerable to a takeover bid.
Stock dived at the start of last week, falling 29% in just one day, amid fears over how the company would cope with its huge $100 billion debt pile given low copper prices.
But Glencore shares had staged a dramatic comeback by the end of the week after the companyreassured shareholders that it wasn't under any balance-sheet pressure and management bought more shares.
While the value has recovered, Monday's big move shows it's still far from stable.
Citi suggested last week that Glencore could pull off a management buyout and take the company private again, but The Telegraph's sources say CEO Ivan Glasenberg is "dismissive" of this idea.