Bloomberg News

Xstrata Rises on Speculation Brazil's Vale Will Bid

January 18, 2008

Xstrata Plc (XTA), the world's fourth- largest copper producer, rose the most in two months in London trading on speculation that Brazil's Cia. Vale do Rio Doce will make a takeover offer.

``Xstrata is up today on consolidation talk,'' said Jawaid Afsar, a trader at Securequity Ltd. in Sheffield, England. ``CVRD is the name in the frame.''

Xstrata advanced 266 pence, or 8.6 percent, to 3,363 pence at the close on the London Stock Exchange, valuing the company at 32.9 billion pounds ($64.3 billion). That's the biggest daily gain since Nov. 8. The stock has risen 47 percent in the past year.

Vale Chief Executive Officer Roger Agnelli, who wants the company to overtake BHP Billiton Ltd. as the world's biggest mining company, is already spending $59 billion over five years to expand in Canada, Australia, China and Mozambique. Rio Tinto Group rejected a takeover bid by BHP last month that threatens to match Vale's iron-ore output.

Xstrata, based in Zug, Switzerland, said Dec. 12 it was holding discussions with ``a number of parties'' and was ``perfectly positioned'' to benefit from consolidation among mining companies.

Xstrata's London-based spokeswoman Claire Divver declined to comment today when contacted by phone. Vale's press office said executives from the company couldn't immediately be reached to respond to requests for information.

To contact the reporters on this story: Brett Foley in London at bfoley8@bloomberg.net; Adam Haigh in London at ahaigh1@bloomberg.net.

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net


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