GLENCORE’s £36bn takeover of Xstrata headed for its climax last night as the Xstrata board prepared to give its verdict on Glencore’s improved offer for the miner.
A decision by the Xstrata board is expected as early as this morning for Glencore’s improved offer of 3.05 shares for every one Xstrata share.
A Takeover Panel deadline for Xstrata to decide its fate is set to expire on Monday morning, leading to a rush of activity last night.
The boards of the commodity and mining giants were understood to be holding last minute meetings in bid to drill down into the final details of the deal.
The takeover would see the creation of one of the biggest mining firms in the world, with a market cap of about £44bn.
Markets were left reeling a fortnight ago when a last minute increase in Glencore’s offer of 2.8 shares led to extraordinary meetings of Xstrata and Glencore being suspended so both shareholder bodies and boards could reconsider the deal.
The deal had been held up over the summer by one of Xstrata’s major shareholders, Qatar Holdings, demanding a better deal out of the takeover.
It had demanded a ratio of 3.25 in June, though sources involved in the deal had said the Gulf state had mellowed on the ratio.
The 3.05 offer saw Glencore’s approach shift from a merger between the two firms to a full takeover by Glencore.
Qatar, Xstrata’s second largest shareholder, had demanded a ratio of 3.25 in June, though in recent days sources involved in the deal had said the Gulf state could compromise.
Xstrata’s independent directors had come under fire after recommending the original Glencore deal and more than £170m of retention packages for 73 of the miner's top managers which many shareholders felt was excessive.
Under the new Glencore offer, Mick Davis, Xstrata’s chief executive, is set to remain on the board for six months before departing. Glencore is also set to retain Xstrata’s chairman, Sir John Bond.