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Mining Week 28/’12: GlenStrata in doubt

July 7, 2012 1 comment

Top Story of the Week:

  • Xstrata vote on merger with Glencore delayed
    • The vote by Xstrata shareholders on the proposed merger between Xstrata and Glencore, originally scheduled for July 12th, has been delayed to a yet to be announced date.
    • Several large shareholders, including Qatar Holding, which holds approx. 11% of the shares, have threatened to try to vote against the deal if the exchange ratio of 2.8 shares of Glencore per Xstrata share is not sweetened. Xstrata’s shareholders have a very strong voice in the deal because Glencore can’t use its 35% of the voting rights. As a result a small group of only some 15% of the shareholders could block the deal.
    • Under pressure of shareholders the proposal of cash retention bonuses for Xstrata executives was adjusted to stock only payments. The planned retention measures were made part of the vote on the merger and threatened to become an obstacle to the approval of the deal
    • The Australian antitrust authorities approved the proposed deal last week, judging that the combination would not be big enough to distort market efficiency. European Union, Chinese, and South African regulators still have to give their judgement.
    • Sources: Xstrata press releases; Financial Times; Wall Street Journal

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