Bloomberg News

Singapore’s GIC Raises Xstrata Stake 20%, Trims Glencore

February 24, 2012

Government of Singapore Investment Corp., which manages more than $100 billion, has raised its stake in Xstrata Plc (XTA) by 20 percent and trimmed its holding in Glencore International Plc (GLEN) since the companies said they planned to combine.

The sovereign fund has increased its Xstrata stake to 29.05 million shares from 24.1 million shares since Feb. 8, the day after Glencore offered to acquire the shares in Xstrata it doesn’t already own for $37.6 billion, data compiled by Bloomberg show. GIC cut its Glencore stake by 21 percent to 33.2 million shares.

Glencore, the world’s largest publicly traded commodity supplier, on Feb. 7 announced jointly with Xstrata, an owner of coal, copper and zinc mines, an agreement to combine under a so- called merger of equals in the biggest-ever mining deal worth 23.9 billion pounds ($37.6 billion).

Xstrata shareholders, including Fidelity Worldwide Investment, Standard Life Plc and Schroders Plc, opposed the deal, asking Glencore to raise the offer of 2.8 of its shares for each one in Xstrata.

Investors holding 16.48 percent of Xstrata can succeed in voting to block the deal. That’s because Glencore won’t be allowed to vote its 34 percent stake in Xstrata, according to the U.K.’s takeover code, putting the final decision into the hands of the shareholders who control the rest of the company.

Mandarine Gestion, another Xstrata shareholder, also wants the offer to be raised, said Yohan Salleron, who helps manage the 950 million-euro Mandarine Valuer fund in Paris. It reduced its Xstrata holding by half to 2.5 percent of the fund after the proposed merger, he said.

“This offer is not fair for Xstrata shareholders,” Salleron said over the phone. “I think Glencore will have to improve the offer about 5 or 10 percent and that’s why we still have a holding.”

The offer represents a deal premium of about 8 percent based on Glencore’s average price in the 20 days before the deal was first reported Feb. 2. That would be the second-lowest premium for any mining deal worth more than $5 billion, according to data compiled by Bloomberg.

-- With assistance from Kevin Crowley in London. Editors: Alex Devine, Tony Barrett

To contact the reporters on this story: Firat Kayakiran in London at fkayakiran@bloomberg.net;

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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