LONDON: Investors in Glencore International and Xstrata, the commodity companies seeking to complete a $33bn combination by the end of the year, are scheduled to vote on the plan on November 20.
Shareholders will receive supplementary circulars, detailing a revised takeover offer, the two Switzerland-based companies said in statements recently. Xstrata on October 1 recommended its investors vote in favour of a sweetened Glencore offer that will create the world’s fourth-largest mining company, coupling Glencore’s trading units with Xstrata’s production sites. Glencore raised its all-share bid last month following opposition from Xstrata investors including Qatar’s sovereign wealth fund. Shareholders with as little as a combined 16.5 percent of Xstrata would be able to block the deal. British takeover rules prevent Glencore from voting its 34 percent Xstrata stake to decide on the deal, which requires 75 percent approval.
Qatar Holding, which owns 12 percent of Zug-based Xstrata and is the largest shareholder behind Glencore, opposed the commodity trader’s initial offer of 2.8 shares for each one in Xstrata, even after Xstrata’s board recommended it. Glencore Chief Executive Officer Ivan Glasenberg raised his bid to 3.05 shares on September 7.
Investors will be asked to consider two resolutions: One to approve the takeover along with £144m ($232m) of retention bonuses, and a second that excludes the pay question, Xstrata said on October 1. The outcome of a third vote, on the incentive payments alone, will determine which of the first two resolutions is taken into account.
If the vote on the retention package is approved by 50 percent of investors, the deal’s success rests on the first resolution; if the payments are rejected, the second resolution determines the outcome. Both require 75 percent approval. Xstrata’s independent directors unanimously recommended that shareholders approve the bid and the bonuses.
WP-Bloomberg
