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Bloomberg

Xstrata's board has recommended that shareholders back a US$33 billion sweetened takeover offer by Glencore International after gaining assurances on board composition and de-linking votes on the bid and bonus payments.
Shareholders will be asked to consider two resolutions.
One was to approve the takeover along with £144 million (HK$1.8 billion) of retention bonuses and a second excluded the pay question, Xstrata said yesterday. This meant the deal could proceed even if the incentive payments were rejected.
The recommendation brings Glencore's billionaire chief executive Ivan Glasenberg one step closer to his goal of creating the world's fourth-largest mining company.
The combination, five years in the making, would couple Glencore's global trading operations with Xstrata's coal, copper, and zinc production, establishing a resources group with about 130,000 employees in more than 40 countries.
"It's risky to split the vote, but it's a calculated gamble," Paul Gait, an analyst at Sanford C. Bernstein in London, said. "If the now separate measures pass, Glencore is free from the taint of railroading through a compensation package against shareholder wishes."
The vote on approving the offer requires 75 per cent approval, while the retention packages require 50 per cent support in a separate vote.
Switzerland-based Xstrata's board unanimously recommended that shareholders vote in support of the resolution that requires approval of the retention package. Glencore raised its offer last month to 3.05 of its shares for each share in Xstrata from 2.8, after investors said the original bid undervalued the target.
Commodities trader Glencore, also based in Switzerland, invited Xstrata to propose changes to the bonus package to ensure shareholder backing for the year's biggest takeover.
Xstrata, the largest exporter of thermal coal, delayed its response to Glencore's revised proposal for a week to resolve issues over management and to determine who would take a seat on the combined board vacated by its chief executive, Mick Davis.
"A current Xstrata Group operational executive will replace Mick Davis upon his departure as an executive director of the board of the combined entity, to preserve the majority of Xstrata directors on the board," Xstrata said yesterday.


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