Xstrata board okays Glencore's higher offer

THE tie-up between commodities trader Glencore International and Xstrata is still alive, with the latter recommending shareholders approve the sweetened offer.
Xstrata board okays Glencore's higher offer Xstrata board okays Glencore's higher offer Xstrata board okays Glencore's higher offer Xstrata board okays Glencore's higher offer Xstrata board okays Glencore's higher offer

Mick Davis

Lauren Barrett

Following the recommendation, Xstrata said that under the new scheme, eligible existing shareholders would vote on two new resolutions at the court meeting.

“We have decided to de-couple the resolutions to approve the merger from the resolution to approve the revised management incentive arrangements,” Xstrata non-executive chairman John Bond said.

“This will, we believe, enable shareholders to vote in line with their convictions in respect of retention arrangements, without influencing their voting intention on the new scheme.”

Glencore is offering 3.05 shares for every one Xstrata share held and had said that would be its final offer.

The main sticking point regarding the recently sweetened 3.05 a share deal was the fact that its chief executive officer, Mick Davis, would no longer be CEO of the new entity, as envisaged in the original deal announced in February.

In response to Xstrata’s concern, Glencore said Davis would be CEO for the first six months of the new company’s life but would then step aside to allow Glencore CEO Ivan Glasenberg to take the top job.

Xstrata and Davis, it seems, have accepted this arrangement.

“My objective during my time as CEO of the combined group will be to preserve and enhance the value Xstrata’s management team has created over the past 10 years through a well-planned integration process and to lay down the foundations for the Combined Group’s success over many decades to come,” he said.

It is expected that the new scheme will become effective before December 31 this year.

This article first appeared in ILN's sister publication MiningNews.net.

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