Glencore Boss Tells Qataris: Don't Rush Me on Xstrata Deal

The Evening Standard (London, England), August 21, 2012 | Go to article overview

Glencore Boss Tells Qataris: Don't Rush Me on Xstrata Deal


Byline: Nick Goodway

THE billionaire boss of commodities giant Glencore today firmly smashed his planned [pounds sterling]52 billion merger with rival Xstrata back into the court of the Qataris who have built up a sizeable stake with which they could block the deal.

Ivan Glasenberg, chief executive of Glencore, declared: "If it doesn't happen now it is not the end of the world. We have been trying to do the deal for the last five years. If it takes another year, another two years or even another five years we can revisit the deal whenever. In the meantime no one else can do anything while we hold our 35% stake in Xstrata."

The Qataris have built up an 11.7% stake in Xstrata almost entirely since the merger was announced six months ago. Because the deal requires the approval of 75% of Xstrata's shareholders, excluding Glencore's 35% stake, this is enough to block the deal when it comes to the shareholder vote on 7 September.

Glencore is offering 2.8 of its own shares for every Xstrata share but the Qataris do not believe this is enough and have called for the ratio to be increased to 3.25 shares.

Glasenberg said: "We think we are offering a fair price and a pretty substantial one. Xstrata's latest profits were down 43% while ours are only down 26%. This is not a hostile takeover .

It has the backing of Xstrata's management and of its independent directors. What do the Qataris see in terms of value which Xstrata's own management does not see? Why did they become buyers only once the merger was announced? Just to block it? I don't get it."

Although Glasenberg said that under Takeover Panel rules he could not rule out any improvement in the bid, his tone suggested he is not considering that imminently. …

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