Xstrata hands Glencore more time for Qatar talks

Mon Jul 9, 2012 8:24am EDT
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By Clara Ferreira-Marques

LONDON (Reuters) - Glencore (GLEN.L: Quote) and rival shareholder Qatar could be granted weeks more to hammer out a deal over the terms of the commodity trader's planned takeover of miner Xstrata XTA.L, easing speculation that the current deadlock could put the deal on ice.

Xstrata will this week set a fresh date for investors to vote on Glencore's proposed $26 billion takeover offer - probably in September to allow for the European summer break, the Olympics in London and half-year results from both the miner and the trader, sources familiar with the matter said.

Xstrata shareholders had been due to meet on July 12, but the miner was forced to delay the vote late last month after adjusting retention packages for its executives in response to shareholder outcry over mostly cash deals.

The new vote date, likely to be at least 24 days after supplementary documents are published this week, is still moveable. But sources familiar with the matter and analysts agree it will mark a deadline of sorts and certainly a goal for negotiations between Xstrata's top shareholder Glencore, and Qatar, which is demanding an improved offer from the trader.

Talks between Glencore and Qatar - which has built up an 11 percent stake in Xstrata and carved out a role as kingmaker in the long-awaited merger - have made little or no progress over the last two weeks, with both sides indicating they are sticking to their guns.

Qatar said last week it was firm in its demand for Glencore to improve its offer to 3.25 new Glencore shares for every Xstrata share held, up from the current 2.8 ratio.

But the sources and analysts said neither Glencore nor Qatar were likely to yield until obliged.

"The Glencore guys are traders, they have a trading mentality, so they will not move before they have to," one source familiar with the matter said. "That means they could leave any change in the ratio until 14 days before the new (shareholder meeting)."   Continued...

A logo of the Swiss mining company Xstrata is shown at the Headquarters in Zug March 26, 2008. REUTERS/Michael Buholzer