Qatar fund remains Xstrata buyer at current prices: sources

Sun Aug 26, 2012 8:38am EDT
 
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By Dinesh Nair and Clara Ferreira-Marques

DUBAI/LONDON (Reuters) - Qatar Holding is targeting a "strategic minority" stake in Xstrata XTA.L even if a merger with Glencore (GLEN.L: Quote) does not go through and the fund is a buyer of the mining giant at current prices, sources familiar with the matter said.

The investment arm of the tiny Gulf state's sovereign wealth fund has proved to be a stumbling block for commodities trader Glencore's proposed $30 billion takeover of Xstrata, demanding improved terms and threatening to vote against the tie-up.

The deal is on the brink of collapse after Glencore refused to raise its offer and missed an informal deadline last week.

The Qatari fund has emerged as the second-largest shareholder in Xstrata with a 12 percent stake and is keen on building its stake further should the deal collapse, the sources aware of the fund's plan said.

"Qatar's objective is to be a strategic minority investor in Xstrata even if the deal with Glencore does not go through. They want to build a position which gives them the right to veto any future mergers," one of the sources said.

"At current prices, they are clearly a buyer," the source added.

The sovereign fund may approach other large Xstrata shareholders if it wants to improve the stake further but is not currently considering a tender offer for Xstrata, the source said.

The Sunday Telegraph reported that the Qatari fund was poised to raise its stake in Xstrata to 25 percent if the planned tie-up with Glencore collapsed, citing sources it said were close to the matter.   Continued...