Glencore is now proposing to offer 3.05 new shares for every Xstrata share, with Ivan Glasenberg as the new CEO in place of Xstrata’s Mick Davies.
LONDON/ZUG (Reuters) – Commodity trader Glencore has raised its offer for miner Xstrata to salvage a bid, now worth about $37 billion, that appeared to be heading for the rocks after Xstrata shareholder Qatar held out for more.
Xstrata said Glencore was now proposing to offer 3.05 new shares for every Xstrata share, up from 2.8, with Glencore Chief Executive Ivan Glasenberg to become CEO of the combined group, instead of Xstrata boss Mick Davis as originally envisaged.
Xstrata said Glencore was also suggesting a possible change to the structure of the deal that could allow it to pass more easily with a simple majority of shareholders.
Glencore’s bid had been teetering on the brink of collapse after Xstrata’s second-largest shareholder, Qatar, with 12 percent, said it would vote against the deal unless it was improved.
Glencore Chairman Simon Murray earlier canceled a meeting with shareholders in Zug, Switzerland, that had been called to vote on the merger, saying there had been “overnight developments”.
Xstrata shares were up 6.4 percent at 1,041.5 pence at 1000 GMT, while Glencore’s were down 5.2 percent at 371.95p.
Glencore investors were due to have met at 9 a.m. (0700 GMT), with Xstrata’s shareholders meeting two hours later, also in Zug, Xstrata’s home base.
POSSIBLE CHANGE TO STRUCTURE
Under the deal’s original structure, holders of just 16.5 percent of Xstrata shares would have needed to vote against the tie-up for the deal to collapse, and Qatar said last week it would vote against, making it very unlikely the bid could have gone through without an improvement.
Glencore left the door open for a change to that structure, as the new bid will consider both a scheme of arrangement, the current structure, and a straightforward takeover. Xstrata’s board and shareholders are expected to resist this change, as non-executives had sought to ensure Glencore would either get full control of the miner or remain at its current shareholding.
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