Xstrata investors are expected to vote against the £45bn tie-in at a meeting in the Swiss town of Zug on Friday morning. The revolt has been spearheaded by state-controlled Qatar Holdings, which is holding out for an improvement on the offer of 2.8 new shares for every Xstrata share held.
But Glencore has stuck to its guns on the terms since Qatar demanded at least 3.25 shares back in June, though the firms have watered down plans for handsome retention packages for board members in the face of investor agitation.
Other prominent shareholders including Knight Vinke and Norway’s sovereign wealth fund are also thought to be unhappy with the offer.
“The deal at 2.8 is dead in the water,” one source familiar with the transaction said last week. “But the Qatari wording has been carefully chosen – they like the merger idea.”
Some investors have raised the prospect of departures from the Xstrata board if the merger falls through, with chairman Sir John Bond and senior independent director David Rough reportedly in the firing line.