Glencore International Plc (GLEN), which agreed to a 17.6 billion-pound ($27.4 billion) offer for Xstrata Plc (XTA) in February, will probably raise its bid when it reports first-half earnings this month, Jefferies Group Inc. (JEF:US) said.
Jefferies expects the world’s largest publicly traded commodities supplier to increase its offer from 2.8 of its shares for each one in Xstrata to three shares, analysts Christopher Lafemina and Seth Rosenfeld said yesterday in a report. They recommend investors buy Xstrata stock.
Pressure on Glencore to raise its bid intensified five weeks ago when Qatar Holding LLC, the biggest shareholder in Xstrata after Glencore with an 11 percent stake, said an offer of 3.25 shares was “more appropriate.” Other shareholders including Knight Vinke Asset Management LLC and Standard Life Plc (SL/) have also called for an increase in the offer.
A raised offer may be announced when Glencore, which already owns 34 percent of Xstrata, reports earnings on Aug. 21, Jefferies said. The bid can be blocked by just 16.48 percent of Xstrata holders under U.K. takeover rules because Glencore cannot vote its stake.
Glencore rose 0.7 percent close at 322.50 pence in London. Xstrata rose 1.5 percent to 861 pence.
To contact the reporter on this story: Jesse Riseborough in London at firstname.lastname@example.org
To contact the editor responsible for this story: John Viljoen at email@example.com