GLENCORE and Xstrata are on track to win shareholder approval for their mammoth mining merger tomorrow, though questions remain over retention packages for key staff.
Qatar Holding, Xstrata’s largest shareholder after Glencore, confirmed on Friday that it plans to support the transaction, but said it “does not feel it appropriate to influence the outcome” of a separate vote on a £140m payout for around 70 unnamed executives at the enlarged firm.
This has sparked a rethink from other shareholders, who plan to vote tactically to ensure the merger succeeds, even if the golden handcuffs are rejected.
The firms are believed to be examining other options to help retain top staff after the merger.
The meeting tomorrow for Xstrata investors is in two parts: first, they will cast two votes to back the merger, with and without the retention package as a crucial element of the deal. Both options require 75 per cent approval.
Insiders are confident that Xstrata investors will support the tie-up, but due to Qatar’s absence from the pay vote, they now expect shareholders to plump for the merger option that does not need additional approval for the staff payouts.
Because the vote on pay only requires 50 per cent approval, and Qatar will not be involved, investors holding around 27 per cent of Xstrata’s shares have the power to block this part.
The firms face a further regulatory hurdle on Thursday, when European competition regulators must decide whether to approve the tie-up or start an in-depth probe.
Glencore is said to have offered concessions such as asset sales in its zinc business to ease anti-trust concerns.