DUBAI/LONDON (Reuters) - Qatar Holding is targeting a “strategic minority” stake in Xstrata XTA.L even if a merger with Glencore GLEN.L 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.
Reuters sources, however, dismissed talks of a specific ownership target by the Qatari fund.
Qatar Holding, which owns stakes in companies such as Credit Suisse CSGN.VX and sports car maker Porsche PSHG_p.DE, has been consistently buying Xstrata shares from the market after Glencore’s all-share bid was announced in February.
The buying briefly stopped after the sovereign fund’s surprise announcement in June that it was asking for improved terms to support the deal. Qatar again raised its stake in late July.
Glencore, which already owns 34 percent of Xstrata, is offering 2.8 new shares for every Xstrata share held to secure a tie-up it hopes will create a mining and trading powerhouse. Qatar has demanded a ratio of 3.25.
Xstrata and Glencore shareholders are scheduled to vote on September 7 on the deal.
Reporting by Dinesh Nair and Clara Ferreira-Marques; Editing by Helen Massy-Beresford