Warning: preg_match(): Unknown modifier '/' in /home/customer/www/industryleadersmagazine.com/public_html/wp-includes/class-wp.php on line 233
Glencore not to change Xstrata terms before vote
 

Glencore not to change Xstrata terms before vote

Glencore

Glencore Plc.

Glencore International Plc, a multinational commodity trading and mining company headquartered in a Swiss town of Baar, is not going to change terms of a of a $33 billion bid for Xstrata Plc, mining company, even though its shareholders have been pressing company’s officials to modify the offer four days before investors vote. Accordingly,  a Glencore merger with Xstrata (“Glenstrata deal”) will probably not materialize unless companies are ready to reach a compromise. Main opponents to the current Glencore’s offer are Qatar Holding LLC and Xstrata’s investors. In addition, Sir John Bond, chairman of Xstrata, feels the breath of dissatisfaction on his back, if as expected the Glencore merger with Xstrata is voted down this Friday (7th of September); he might be pressured to step down from his position.

Glencore’s offer of Glenstrata deal

After seven months of negations regarding the Glencore merger with Xstrata this weekend no meetings were held. According to sources, no meetings are planned between Glencore and Qatar Holding, which is said to be the strongest opposing shareholder of Xstrata. As it has been stated by a person familiar with matter, if the Glencore’s offer is voted down, company’s officials are considering the possibility of a new offer which would be difficult to block.

The Glencore’s offer was made in February. However the opposition to the Glencore merger with Xstrata strengthened when Qatar Holding, owner of only 12 percent of Xstrata’s shares), had confirmed that it would vote against current terms of the Glencore’s offer at a vote on 7th of September.  Glencore is the owner of 34 percent of Xstrata’s shares. Company’s officials are convinced that the Glencore merger with Xstrata would result in creating the world’s fourth-biggest mining company. Nevertheless, Xstrata’s investors are expected to vote down the Glencore merger with Xstrata at a meeting in the Zug, Switzerland. The strong opposition to the Glencore’s offer was intensified by state-controlled Qatar Holding, which demands an improvement on the current offer of 2.8 new shares for every Xstrata’s share held. However Qatar Holding demanded 3.25 shares back in June and since then company’s officials are not likely to change the Glencore’s offer.

Yet, other Xstrata’s investors including Knight Vinke and Norway’s sovereign wealth fund are also unsatisfied with the current Glencore’s offer, according to some sources. As a person familiar with the matter said last week, “The deal at 2.8 is dead in the water. But the Qatari wording has been carefully chosen – they like the merger idea.”

However the lack of negations during the last weekend calls the Glencore merger with Xstrata into questions. Analysts claim that the Glencore’s offer will be blocked, especially if we take into consideration the structure, which is also known as a scheme of arrangement, according to which just 16.48 percent of Xstrata’s shareholders can block the transaction and at the same time Glencore must not vote its 33.65 percent Xstrata’s shares. All that means that Qatar Holding, which purchased Xstrata’s shares few months ago, will be able to almost single-handedly block the Glencore’s offer, which needs, on the other hand, 75 percent stakeholders backing.

Sir John Bond in troubles

The whole situation with uncertainty about the Glencore merger with Xstrata is urging Sir John Bond to step down as chairman of Xstrata if the Glencore’s offer will be voted down at the meeting held this week.  Issues, which were brought to the light by institutional shareholders, will strongly question Sir John Bond‘s abilities if the deal with full backing of Xstrata’s board is blocked.

Moreover terms of the Glencore merger with Xstrata, which were negotiated by Sir John Bond, are also questioned by those Xstrata’s investors.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Leave a Reply

Your email address will not be published.

Recent Posts

Beeple Getting Hacked Resulted in His Followers Losing Over $438,000 in Crypto

Beeple Getting Hacked Resulted in His Followers Losing Over $438,000 in Crypto

Two tweets were posted using NFT artist Beeple’s account. The first one promoted an exclusive collection with Louis Vuitton. The second tweet announced that Beeple would soon rel
17 hours ago
Microsoft Selling Metaverse to Kawasaki: It’s A Whole New World

Microsoft Selling Metaverse to Kawasaki: It’s A Whole New World

Microsoft’s corporate vice president of mixed reality, Jessica Hawk, recently told CNBC that the metaverse will change how people function across a variety of devices and platfor
19 hours ago
Cryptocurrency Market Updates: Bitcoin Could Hit $500,000 Per Coin

Cryptocurrency Market Updates: Bitcoin Could Hit $500,000 Per Coin

On March 15, Novogratz went so far as to predict that the Bitcoin future price will reach half a million dollars per coin by 2027. He made this statement at the Bitcoin 2022 confer
2 days ago
Klarna CEO Uses Pre-Recorded Message For Laying Off Employees

Klarna CEO Uses Pre-Recorded Message For Laying Off Employees

Managers and HR personnel must be coached on how to compassionately convey the message as it is one of the most difficult conversations an individual can have. Open and honest comm
2 days ago
China Might No Longer Be An Apple Manufacturing Country

China Might No Longer Be An Apple Manufacturing Country

The iPad manufacturer has previously sought to remove China as the main Apple manufacturing country. Trade tensions and a strict Covid-19 policy has previously resulted in supply c
3 days ago
D.C. Refuses to Let Zuckerberg Wash His Hands Off Cambridge Analytica

D.C. Refuses to Let Zuckerberg Wash His Hands Off Cambridge Analytica

In the same year, Racine had sued Meta, then known as Facebook, for failing to protect user privacy and deceiving them about how much data is collected and how it was used. The Att
3 days ago