Bloomberg News

BlackRock Says Funds May Differ on View of Glencore-Xstrata Deal

March 29, 2012

BlackRock Inc. (BLK:US), the second-largest shareholder in Xstrata Plc (XTA) with about 5.5 percent, said its funds holding the mining stock may vote differently on Glencore International Plc’s 21.1 billion-pound ($34 billion) offer.

“While the firm generally seeks to reach a single view on proxy issues, portfolio teams on occasion vote differently in accordance with what is believed to be in the best interests of the clients invested in their portfolios,” BlackRock, the world’s largest money manager, said in a statement today e-mailed to Bloomberg News.

BlackRock’s Catherine Raw, who co-manages the firm’s $14 billion World Mining Fund with Evy Hambro, yesterday said in an interview that the natural resources team supported Glencore’s all-share offer for Xstrata. Investors including Schroders Plc (SDR), Fidelity Worldwide Investment and Standard Life Plc (SL/) have called for the offer, announced Feb. 7, to be raised.

Xstrata shareholders may get to vote on the offer in late May or early June, Liberum Capital Ltd. said March 13. Investors holding 16.48 percent of Zug, Switzerland-based Xstrata can succeed in voting to block the deal.

That’s because the U.K. takeover code prevents Baar, Switzerland-based Glencore from voting the 34 percent stake it already has in Xstrata, putting the final decision into the hands of the shareholders who control the rest of the company.

“If you were to ask me today whether or not the natural resources team would accept the offer, then yes, we would,” Raw said yesterday in Hong Kong. “There are other holders in BlackRock that just own Xstrata or just own Glencore, so there are differing views across the firm as to whether or not the deal is a good one.”

Raw said BlackRock’s natural resources team viewed the combination of Glencore and Xstrata as a “better solution” for both companies.

“BlackRock has holdings in both Glencore and Xstrata across various portfolios and strategies within the firm,” the money manager said today in its statement. “As part of our governance process, we have a fiduciary duty to always act in the best economic interests of our clients.”

To contact the reporter on this story: Jesse Riseborough in London at jriseborough@bloomberg.net

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


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    (BlackRock Inc)
    • $324.87 USD
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