Glencore increases Xstrata merger bid

Published:  11 Sep at 9 AM

Glencore, the commodities firm, has renewed an offer for a merger with Xstrata, the mining group. The revised deal includes Glencore lifting its offer from 2.8 shares for every Xstrata share to 3.05 shares. The new deal also includes a provision that would mean Ivan Glasenberg of Glencore becoming head of the group six months after the deal is finalised. He would take over from Xstrata’s boss, Mick Davis.

The latest offer will now have to be approved by Xstrata shareholders. However, some have already raised misgivings. In a statement, the firm’s independent directors said they were concerned about the governance changes being proposed for the merged business, especially the provision which would see Mr Glasenberg take the position as the group’s chief executive.

Glencore has already tried to assure Xastra that the revised deal still represents a merger of equals and not a takeover. The trader also said that it was not willing to increase the latest offer.

Xstrata is 12 per cent owned by Qatar Holding which said the share offer was too low. The firm is looking for a 3.25 Glencore share deal for every Xstrata share.

The Xastra directors added in their statement that the offer being made did indicate a merger because they would expect a significantly higher offer in the event of a takeover bid.