Glencore delays vote on Xstrata bid

2012-09-07 11:30

London - Glencore’s $34bn takeover bid for miner Xstrata appeared to be back on after the commodities trader postponed a shareholder meeting on Friday that had been expected to vote on the faltering deal.

Glencore Chairperson Simon Murray gave no details, telling shareholders in Zug, Switzerland, only that there had been “developments overnight”, hinting at an improved deal.

“It has happened very recently, overnight,” he said.

Glencore’s bid had been teetering on the brink of collapse after Xstrata’s second-largest shareholder, Qatar, said it would vote against Glencore’s offer of 2.8 new shares for every Xstrata share held.

“If Glencore’s adjourning the meeting then it looks like they probably will be raising the exchange ratio,” said an analyst who declined to be named.

Xstrata shares were up 3.47% at 1,013 pence at 07:27 GMT, while Glencore’s were down 4.55% at 374.5p, indicating that the market thinks so, too.

Glencore investors were due to have met at 9 a.m. (07:00 GMT), with Xstrata’s meeting following a couple of hours later, also in Zug, Xstrata’s home base.

If Glencore changed the terms of its offer at the last minute, both companies would have to delay the shareholder votes to meet regulatory requirements, probably by at least two weeks.

Under the deal’s structure, holders of just 16.5% of Xstrata’s shares needed to vote against the planned tie-up for the deal to collapse, and Qatar, with 12%, said last week it would vote against the Glencore proposal - making it virtually impossible the bid would go through without an improvement, or a truce between the two.

Qatar and Glencore had not met since the Gulf state’s sovereign wealth fund demanded an improvement in June to the trader’s offer and both sides had said they would stick to their positions.

Glencore, with a 34% stake, has long coveted a full tie-up with Xstrata to create a mining and trading powerhouse. It made its move in February, less than a year after a listing largely motivated by the desire to do more ambitious deals.

Glencore, Qatar and Xstrata spokespeople declined to comment.

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