THE Qatari sovereign wealth fund, the second-largest shareholder in Xstrata behind Glencore, said yesterday it will block the mega-merger between the two commodity giants.
Qatar has been fighting for an improved ratio on the 2.8 shares for every one existing Xstrata share offered by Glencore in February. It said in June that a ratio of 3.25 would better reflect the benefits of the merger. Glencore has so far resisted calls to up the share ratio, with chief executive Ivan Glasenberg calling the 2.8 ratio a “fair” deal.
It is understood that Qatar has a big enough shareholding to block the deal completely at the shareholder meeting on 7 September. Glasenberg said last week that the merger was not a “must-do deal”, which suggests the takeover might not ever come to fruition if the Qataris block the vote.
In a statement, the Middle Eastern wealth fund said: “Qatar believes that Xstrata has a strong future, whether in combination with Glencore on acceptable terms or as a standalone entity, and that its shares represent an attractive long-term investment.”
Meanwhile, Qatar bought further shares in Xstrata yesterday, taking its holding to 12.288 per cent of the company.