ENRC will not make formal bid for rival Kazakhmys

By Eric Onstad

LONDON (Reuters) - Mining group ENRC (ENRC.L: Quote, Profile, Research) ended two months of considering a takeover of Kazakh rival Kazakhmys (KAZ.L: Quote, Profile, Research), saying it would not make a formal bid ahead of a Friday deadline imposed by regulators.

Kazakhmys said on Tuesday it was relieved to be past a period of uncertainty as its shares dropped, while Eurasian Natural Resources Corporation (ENRC) said it was looking at other possible ways to expand its business.

Shares in Kazakhmys closed down 2.1 percent at 1,735 pence, rebounding from a fall of 7 percent when ENRC put out its statement. ENRC ended up 3.1 percent at 1,377p.

Kazakhmys, the world's 10th biggest copper producer, has a market capitalisation of $15.4 billion (7.9 billion pounds), less than half of ENRC's $34.6 billion.

ENRC, which floated on the London stock exchange in December, said on March 12 it was considering a takeover of its rival, but failed to submit any offer until last week when it made a non-binding proposal.

Kazakhmys quickly rejected the 7.05 billion pounds approach from the world's biggest ferrochrome producer.

An ENRC spokesman said last week's informal offer -- which valued Kazakhmys at 1,550p per share, below its market price -- was based on prices in force when the two sides held initial discussions in January.

Kazakhmys shares traded in a range between 950p and 1,402p in January.