July 23, 2012 / 9:44 AM / in 5 years

Qatar Holding adds to Xstrata stake in weak market

LONDON (Reuters) - Qatar Holding, the second-largest shareholder in takeover target Xstrata XTA.L, has added to its stake in the miner, in its first purchase since it made an unexpected demand for better terms from suitor Glencore (GLEN.L) last month.

A logo of the Swiss mining company Xstrata is pictured at its headquaters in Zug, February 6, 2012. REUTERS/Romina Amato

Qatar spent just under 5 million pounds ($7.8 million) to buy an extra 590,390 shares on Friday at 8.47 pounds each, according to a regulatory filing on Monday, taking its stake to 10.997 percent of the miner and building what is already the largest holding after commodities trader Glencore’s 34 percent.

Xstrata shares were trading at 8.18 pounds on Monday at 0915 GMT, down 2.7 percent, marginally above a 3.2 percent drop in the broader UK mining sector .FTNMX1770, as fresh concerns over Europe weighed on the market.

Glencore, aiming to build a mining and trading powerhouse by tying up with Xstrata, is offering 2.8 new shares for every Xstrata share in a $26 billion offer.

Qatar, which has largely built its stake since a takeover bid was announced in February, was expected to support Glencore but surprised the market in June by demanding an improved ratio of 3.25.

Glencore and Qatar are currently locked in talks.

Xstrata shareholders are due to vote on the deal on September 7., meaning, under UK rules, that Glencore has until around August 24 if it is to change the terms of the bid. It could do so later, but would have to reschedule the vote for a second time.

($1 = 0.6397 British pounds)

Reporting by Clara Ferreira-Marques; Editing by Jon Loades-Carter

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