Qatar may ease Glencore’s path to Xstrata deal

 
Marion Dakers
QATAR has built its stake in mining giant Xstrata up to five per cent, in a move that bankers said could help smooth the path of a £23bn merger with Glencore.

The Qatar Investment Authority has boosted its Xstrata holding, worth £1.7bn at current prices, to five per cent through stock market purchases, up from three per cent before Glencore announced its merger interest in February.

This makes Qatar’s sovereign wealth fund the third biggest investor in Xstrata, after Glencore itself, which has a 34 per cent holding, and Blackrock, which has around 5.4 per cent.

“Getting the Qataris on board will be good for Glencore. They are not activist investors and won’t be looking at gaining management influence,” said a Dubai-based banker.

“But they are opportunistic and won’t commit a pound unless they are seeing clear benefits.”

Glencore chief Ivan Glasenberg and Xstrata’s Mick Davis are preparing to set off on a global investor roadshow this month, aimed at convincing shareholders of the value of their merger agreement.

The deal needs approval from 75 per cent of investors, excluding Glencore. But some large shareholders, including Schroders and Standard Life, have said the all-share agreement is a raw deal for those holding Xstrata stock, and are demanding a premium.

Qatar, which has spent billions of pounds on energy and commodity holdings in recent years, surprised many observers when it decided not to invest in Glencore’s enormous stock market float last year.