Xstrata Plc (XTA), facing pressure from shareholders to improve the terms of a merger with Glencore International Plc (GLEN), will delay a vote on the deal until September, the Sunday Times reported yesterday.
Talks with Qatar Holding LLC, the investment arm of the country’s sovereign-wealth fund, on the price of the deal may continue for weeks, the Financial Times reported today without saying where it got the information. Xstrata will release a document with updated terms as soon as this week, it said, citing three unidentified people familiar with the situation.
Qatar, which has spent $4 billion amassing an 11 percent Xstrata stake, on June 26 asked Glencore to raise its February bid from 2.8 of its shares for each one in Xstrata to 3.25. Standard Life Plc, Schroders Plc and Knight Vinke Asset Management LLC have also called for the initial bid to be sweetened.
Qatar held a “firm” position in talks with Glencore (805), Prime Minister Sheikh Hamad Bin Jasim Bin Jabr al-Thani said July 5. The merger is “positive for both sides,” he said, declining to elaborate on the price as the companies are still negotiating.
Glencore fell 1.5 percent to HK$37.25 at 13:59 p.m. local time in Hong Kong trading, the same as the benchmark Hang Seng Index. Xstrata closed 1.4 percent lower on July 6 in London.
Xstrata has court approval to reschedule the July 12 shareholders meeting to vote on Glencore’s offer, it said July 6. The miner earlier pushed back the meeting to allow for changes to the merger documents after Xstrata executive retention bonuses were linked to cost-saving targets, it said.
Glencore, the largest publicly traded commodities supplier, is seeking to gain Xstrata’s copper, coal and zinc operations. The 17 billion-pound ($26.3 billion) takeover by Baar, Switzerland-based Glencore is the biggest announced this year, according to data compiled by Bloomberg.
A rejection of the bid by 16.48 percent of shareholders is enough to block it because U.K. takeover rules prevent Glencore using its 34 percent stake in Xstrata to vote on the deal. There is at least 14 percent of shareholders opposed to the current deal. Xstrata’s board recommended shareholders approve the offer.
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