* Seen pricing at midpoint of 530 pence - sources
* Final price due to be announced on Thursday
* On track to be London's largest ever listing
By Kylie MacLellan and Clara Ferreira-Marques
LONDON, May 18 (Reuters) - Trader Glencore is set to price
its bumper $11 billion market debut in the middle of its initial
range, balancing appetite for its shares with concerns from some
investors over valuation, sources familiar with the matter said.
"The market understands it will be priced at 530 pence," one
of the sources said on Wednesday.
At that price -- the exact midpoint of Glencore's original
480 to 580 pence range, but just below the middle of narrower
guidance issued earlier this week -- the world's largest
diversified commodities trader will be worth 36.5 billion pounds
Glencore, which is also listing in Hong Kong, is in the
final stage of the potentially record-breaking initial public
offering of what would be a 16.4 percent stake, assuming no
overallotment and no conversion of its convertible bonds.
Dozens of its advisers and bankers worked through the night
and into Wednesday on the complex process of allocating the
shares after books closed on Tuesday, a day early.
Final discussions on the price started late on Wednesday
afternoon and will likely last into the night, the sources said.
The decision will be announced to the market on Thursday,
before conditional trading in the shares begins in London.
With a 10 percent overallotment option likely to take the
total size of Glencore's offering to $11 billion, it is set to
be London's largest-ever listing, overtaking Russia's Rosneft,
which raised $10.6 billion in 2006.
Its market value will also propel the commodities trader
straight into London's FTSE-100 index of bluechip shares.
Glencore has said there is strong demand for its stock and
had enough buyers to cover its offer within hours of starting
the sale process earlier this month. It now has enough several
times over, with the book "multiple times" covered.
The trader has said demand was not rattled by the sell-off
in commodities, which it dismissed last week as "froth".
Several top fund managers, however, have said much of the
appetite has come from tracker funds which will have to buy into
the trader once it is in the FTSE index. Cornerstone investors
have also already signed up to buy almost a third of the shares.
Fund mangers told Glencore this week to set a price around
the midpoint, or face a drop in value in its first weeks as a
The group's top executives and cornerstone investors are
tied in through lock-ups of at least six months, but share
performance will matter to Glencore, particularly if the company
is to use the offering as planned to pursue acquisitions, not
least any potential offer for peer Xstrata.
Sources close to the matter, however, said on Tuesday that
investors were being told to place orders at or above 530 pence
to ensure they are allocated stock.
"The price seems to have struck a nice balance between where
accounts were prepared to move to and where the company was
happy to sell," the first source said.
Starting at 530p -- also the final price pencilled in by
spread betters -- Glencore is expected to track higher in grey
market, or conditional trade. BGC Partners earlier indicated an
opening level of 545 to 552 pence per share.
Glencore, which will trade as GLEN.L, has consistently
declined to comment on the pricing process.
Founded in 1974 by trading sensation Marc Rich, Glencore has
until now held on to a tradition of discretion. Its publicity
shy top executives, however, will become paper millionaires with
the initial public offering, with Chief Executive Ivan
Glasenberg's stake worth $10 billion
Glasenberg and other existing shareholders will control
around 80 percent of the company after listing.
(Editing by David Cowell and Alexander Smith)
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