Xstrata granted extra week to decide on Glencore bid

Fri Sep 21, 2012 1:24pm EDT
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By Sarah Young

LONDON (Reuters) - Britain's takeover regulator has given mining group Xstrata Plc an extra week to decide whether to accept the $36 billion revised offer from Glencore, prompting jitters over what is the latest twist in a seven-month saga.

The unexpected extension - granted at the request of both firms - surprised the market, which had been expecting Xstrata to announce its decision by Monday at the latest.

Analysts attributed the delay to talks around management incentive schemes and the nomination of Glencore's chief executive for the top job at the merged entity, rather than Xstrata's, which was proposed by Glencore in what it called its final offer, made earlier in September.

Shares in Xstrata closed down 4.2 percent in London while Glencore fell 1.7 percent.

"The extension was requested to enable Xstrata's independent non-executive directors to take full account of feedback from consultation with key Xstrata shareholders," Xstrata said in a brief statement.

It now has until October 1 to say whether or not it will recommend Glencore's offer to shareholders, having first backed a lower offer in February.

Glencore, already Xstrata's biggest shareholder, raised its offer to 3.05 shares for every Xstrata share held from a previous offer of 2.8 shares, in a last-ditch attempt to rescue the deal after Xstrata's second-biggest investor Qatar Holding demanded improved terms in June.

The new proposal differs from the original one, not only in value but also in the fact that Glencore's chief executive, Ivan Glasenberg, is to take over the helm of the combined business from Xstrata chief Mick Davis within six months.   Continued...

A logo of the Swiss mining company Xstrata is shown at the headquarters in Zug September 7, 2012. REUTERS/Michael Buholzer