Glencore heads for finish line in Xstrata marathon

Tue Nov 20, 2012 7:42am EST
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By Clara Ferreira-Marques and Emma Farge

LONDON/ZUG, Switzerland (Reuters) - Shareholders in commodities trader Glencore (GLEN.L: Quote) overwhelmingly approved its $31 billion takeover of Xstrata XTA.L, setting the stage for the miner's own investors to give their go-ahead and all but seal the deal.

Some 99 percent of Glencore shareholders said "yes" to one of the mining sector's biggest deals on Tuesday after a meeting that lasted just over ten minutes. Glencore is controlled by its senior executives and had been expected to back the deal by a large margin.

More Glencore owners opposed the name change - to Glencore Xstrata - than voted against the tie-up to create a mining and trading powerhouse.

The vote by Xstrata's investors, however, will be more complicated.

They are due to give their verdict over the next few hours in a complex and drawn-out set of votes, which analysts expect to reject a controversial retention plan intended to ensure managers stay on board to deliver important projects.

Investors have already forced changes to two key elements of the long-awaited deal - the price, which Glencore improved at the eleventh hour in September, and the retention plan, which Xstrata revised in June.

Initially, the whole merger was conditional on the 140 million pound ($223 million) "golden handcuffs" plan.

A strong vote against it would be a blow for Xstrata's board, its outgoing chief executive, mining veteran Mick Davis, and for its chairman, John Bond, formerly of Vodafone and HSBC.   Continued...

A logo of Swiss mining company Xstrata is shown at their headquarters in Zug, November 13, 2012. REUTERS/Michael Buholzer