The Swiss commodities trader plans to sell as much as $11 billion in shares in London and Hong Kong, it said today in a statement. The IPO may value Glencore at about $55 billion to $60 billion, said two people with knowledge of the sale, who declined to be identified because the information is private.

Goldman said this week the risks of investing in commodities outweigh potential gains, dropping its recommendation to buy a basket of raw materials including crude oil, copper, cotton and platinum. Three companies have shelved plans for a London IPO this month as Europe’s debt woes and a nuclear crisis in Japan sap investor demand.

“They have been a private-run company and made a truckload of money and you’d have to think that these guys would have more market intelligence than most,” said Ric Ronge, who helps manage the equivalent of $1.3 billion at Pengana Global Resources Fund in Melbourne, adding that he will study the IPO pricing. “In the near term we wouldn’t be surprised if there was a correction or a pull-back but the long-term story is still very much intact.”

May 19 Pricing

Glencore is targeting $6.8 billion to $8.8 billion from a sale of new stock, while existing holders may sell $2.2 billion in shares for tax purposes, it said. Pricing may be announced around May 19, according to a term sheet for the offering.

The company will use the funds for expansion and acquisitions, according to the statement. The IPO includes an overallotment option, known as the greenshoe, of 10 percent of the offer, which may increase the total proceeds to $12.1 billion. Glencore is likely to be included in the FTSE-100 Index on the first day of trading in London, it said.

“I wouldn’t completely rule out participating, but I can’t say that I’m naturally drawn to the business because of my perception that commodities trading is unpredictable,” said Ian Henderson, who manages $10 billion of natural-resources stocks at JPMorgan Chase & Co. in London. “It’s obviously extremely well run and presumably with a little bit more firepower the company can succeed in growing its market share.”

Anglo, Morgan Stanley

A valuation of as much as $60 billion would place Glencore within $10 billion of Anglo American Plc, the world’s sixth- largest mining company by market value, and ahead of Morgan Stanley, one of the biggest commodity traders on Wall Street.

Glencore named Tony Hayward, former chief executive officer of BP Plc, as a senior independent director and Peter Coates, Leonhard Fischer, William Macaulay and Li Ning as non-executive directors. CEO Ivan Glasenberg and Chief Financial Officer Steven Kalmin will remain in their roles and a chairman will be announced shortly, it said.

Commodities, which jumped 20 percent last year, slumped the most in four weeks on April 12 as Japan’s nuclear crisis raised investor concern the global economic recovery will slow. This year’s 16 percent advance in the S&P GSCI Index of 24 raw materials is helping to drive up inflation, spurring central banks to consider higher interest rates that may hamper growth.

About $5 billion will be allocated to capital spending over the next three years, Glencore said. It agreed to pay $3.2 billion to local partners to increase its stake in Kazakhstan- based metals producer TOO Kazzinc to 93 percent from 50.7 percent. The purchase will be funded by $2.2 billion in cash and $1 billion in new Glencore shares, it said.

IPOs Postponed

U.K. vacuum-pumps maker Edwards Group Plc, Indian billionaire Gautam Thapar’s BILT Paper Plc and Internet-payment provider Skrill Group Plc deferred London IPOs this month citing a lack of investor demand. That’s the biggest monthly number since November 2007, when three IPOs were pulled in the city, according to data compiled by Bloomberg.

“It’s been a rough environment for European IPOs and investors are being very selective,” said Josef Schuster, founder of Chicago-based IPOX Capital Management LLC, which oversees about $2.5 billion. “It should have little impact on Glencore because it’s got a secondary portion in Hong Kong, and a deal of this nature will attract investors around the world.”

No IPOs have been canceled in Hong Kong this year, even as Japan’s earthquakes prompted a global market selloff, Bloomberg data show. Fifteen companies have raised $2.6 billion in the city this year.

Close Partnership

Glencore, which changed its name from Marc Rich & Co. after management bought out former fugitive U.S. financier Marc Rich in 1994, is ending more than three decades of operating as a closely held partnership.

“It’s a bit of a one-of-a-kind, this offering, a very special company, an unusual sector and set of risks that investors do not necessarily have a chance to get exposure to typically,” Henri Alexaline, an analyst at BNP Paribas SA in London, said yesterday by phone. “As things stand, I don’t think that we will see this transaction being derailed.”

Glasenberg, who has been with the trader since 1984 and CEO for nine years, is set to benefit from the share sale along with other executives of the company, which is owned by senior management. Blackstone Group LP paid its founders Stephen Schwarzman and Peter G. Peterson $2.33 billion after its IPO in June 2007, which raised $4 billion.

Lock-Up

Executive directors have entered into a lock-up agreement for their stock until five years after the IPO, with a staggered release after the first year, Glencore said in the statement.

“All the partners are still invested for the long term; no one is taking money off the table,” Glasenberg said in a phone interview. “We are not aiming to catch the top of the cycle and do the IPO right at the top of the cycle.”

An increase in prices for metals including copper, aluminum and nickel helped boost Glencore’s profit 39 percent to $3.8 billion in 2010. Sales rose to $145 billion from $106.4 billion, ranking the Baar, Switzerland-based company behind Vitol Group, which reported revenue of $195 billion.

Glasenberg said today there would be “good value” in combining the company with Xstrata Plc, the Zug, Switzerland- based miner that’s 34 percent held by Glencore.

“Any consideration of this matter will be for the new board post the IPO,” Glasenberg said. “We’ve always said there would be good value in putting the two companies together but this is not a decision for today.”

Glencore Holdings

Glencore also owns 8.8 percent of United Co. Rusal, the largest aluminum producer, 74 percent of Katanga Mining Ltd. and 71 percent of Australian nickel miner Minara Resources Ltd. It has stakes in Century Aluminum Co. and zinc producer Nyrstar NV.

“What Glencore really tries to achieve by the listing is to get currency for further acquisitions which allows them to do larger deals,” IPOX’s Schuster said. “When raw-material prices were much lower five years ago, it would be good for investors but now it’s a big risk. Given current commodity prices, it’s possible that Glencore will overpay for the acquisitions.”

A 2009 convertible bond sale, raising $2.2 billion and the company’s first such offering, attracted investors including BlackRock Inc., Government of Singapore Investment Corp., Zijin Mining Group Co. and First Reserve Corp. and valued Glencore at $35 billion, it said at the time.

BNP Paribas valued the company at $59.3 billion in a March report. Liberum Capital Ltd. valued Glencore at $47 billion to $51 billion in a report last July.

Conservative Value

The company’s 2010 profit indicates that a value of $60 billion may be “conservative,” given typical earnings before interest, tax, depreciation and amortization multiples in the industry, RBC Capital Markets said March 3. Glencore posted Ebitda of $6.2 billion for last year.

“Everything is down to valuation,” JPMorgan’s Henderson said, referring to potential investment in Glencore. “My sense is the business is not being stupidly priced for this placing.”

Glencore employs 2,700 people at trading units across 40 nations and about 54,800 people at its industrial units in more than 30 countries, according to today’s statement. It’s the largest shareholder in Xstrata, with a $24 billion stake.

The company plans to pursue a “progressive” dividend policy and maintain or increase its payout each year. Interim dividends will represent about one-third of the total ordinary dividend each year, it said, adding that a $350 million interim payout will be declared in August, equating to a full-year dividend of more than $1 billion.

Marc Rich

Rich founded the company in 1974 after spending more than 20 years at Philipp Bros., then the biggest commodities trader. He sold his share to management 20 years later and the company was renamed Glencore, short for “global energy commodity resources.”

Citigroup Inc., Credit Suisse Group AG and Morgan Stanley will manage the IPO as global coordinators, the term sheet shows. Bank of America Corp., Barclays Plc, BNP Paribas, Societe Generale SA and UBS AG have been appointed joint bookrunners and Liberum Capital Ltd. as syndicate member. The offer is expected to be completed in May, Glencore said.

“There’s a buzz in general about this particular IPO, it’s been talked about so much,” BNP’s Alexaline said. “There is definitely an excitement and euphoria around. Maybe it’s a little bit too excessive, but from that standpoint it’s really one of the hot stories this year.”