Glencore puts its cards on the table

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Commodities supplier says it has no intention of raising its share swap offer any higher

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Glencore says it will not raise its merger offer for Xstrata any higher after sweetening the deal by 9 per cent last Friday. Photo: AFP

Eric Ng

Published: 12:00am, 11 Sep 2012Updated: 9:12am, 21 Aug 2017

Glencore International, the world's

largest publicly traded commodities supplier, says its merger offer to swap each share of Xstrata that it does not already own for 3.05 Glencore shares will not be raised further.

It also says Mick Davis, the current boss of Xstrata - a global metals miner - will become the chief executive of the combined group for up to only six months. After he steps down, he will be succeeded by Glencore chief executive Ivan Glasenberg.

Switzerland-based Glencore has a 34 per cent stake in Xstrata, also based in Switzerland. Last Friday, London and Hong Kong-listed Glencore sweetened its offer for Xstrata by 9 per cent by revising up its offer of 3.05 Glencore shares for each Xstrata share from 2.8.

Trading of Glencore shares was suspended in Hong Kong yesterday, pending an announcement about its offer terms. Trading will resume today.

Acceptance of the sweetened deal by Qatar Holdings, a sovereign investment vehicle, is key since it holds 12 per cent of Xstrata and had said it would not accept Glencore's pre-sweetened bid. Shareholders holding a combined 16.48 per cent stake in Xstrata can block the deal since British takeover rules prevent Glencore from voting on its 34 per cent Xstrata stake.

Qatar was demanding 3.25 Glencore shares for each Xstrata share it holds.