Qatar keeps Glencore guessing on Xstrata bid

Tue Sep 11, 2012 5:36am EDT
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By Clara Ferreira-Marques and Kate Holton

LONDON (Reuters) - Qatar, Xstrata's XTA.L second-largest investor, has held back immediate support for Glencore's raised bid for the miner, despite an apparent rapprochement last week, saying in a rare statement on Tuesday it was still considering its position.

The tiny, gas-rich Gulf state has become an unexpected kingmaker in commodity trader Glencore's now $36 billion bid for Xstrata, the world's fourth largest diversified miner, and its efforts to create a mining and trading powerhouse.

Through aggressive buying in the market since the proposed takeover was announced in February, Qatar's sovereign wealth fund has built up a stake of more than 12 percent in Xstrata - a key position in a deal structure that allows just 16.5 percent of Xstrata shareholders to block any bid.

"Qatar Holding wishes to make clear that it has made no decision yet as to whether or not it would accept the revised proposal," it said in a brief statement, its first since Glencore's revised final bid was released on Monday.

"QH will make its decision in due course after giving careful consideration to the implications of the proposed management changes, the other elements of the revised proposal and the views of Xstrata's board."

Qatar's surprise announcement in June that it would not support the initial offer from Glencore, which owns 34 percent of Xstrata, eventually forced the commodities trader to back down at the last minute last week and raise its all-share bid, though not to the ratio initially demanded by the Gulf state.

Until Tuesday, Qatar had been silent on the revised offer.

Sources familiar with the matter have said Qatar, irked by the assumption that it would automatically back any higher Glencore offer, feels little pressure to decide on its position immediately and could even wait beyond a statement from Xstrata's board, due by September 24, and hold out until closer to a vote, which could be in over a month's time.   Continued...

The logo of Glencore is seen in front of the company's headquarters in the Swiss town of Baar September 7, 2012. REUTERS/Michael Buholzer