Glencore shareholders back Xstrata merger deal
London (Platts)--20Nov2012/657 am EST/1157 GMT
An overwhelming majority of Glencore shareholders has backed the
company's proposed merger with Switzerland-based mining group Xstrata, the
commodities producer and trader said Tuesday.
At a Glencore general meeting held Tuesday, 99.42% of votes were cast in
favor of the planned merger, the company said in a stock exchange notice.
Completion of the merger remains conditional upon, among other things,
approval of the merger by Xstrata shareholders at its own shareholder meeting
later Tuesday, certain regulatory approvals and completion of the court
process as set out in the amended scheme document in connection with the
merger published by Xstrata on October 25.
EU competition authorities are due to make a ruling on the proposed deal
later this week, with market attention focused on the combined companies'
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US investment bank Jefferies suggested in a report earlier this month
that the sale of Xstrata's 489,000 mt/year San Juan de Nieva zinc smelter in
Spain may be necessary to allay EU competition concerns.
Xstrata and Glencore said in late October they had reached an agreement
on the final terms of a revised all-share merger of the two companies, which
would be independent of shareholder approval of proposed retention packages
for senior Xstrata officials.
The final agreed merger ratio of 3.05 Glencore shares for every Xstrata
share represents a 17.6% premium over the ratio of 2.59 implied by the
companies' closing share prices on February 1, 2012.
Qatar Holdings, Xstrata's second-largest shareholder, said last week it
would back the amended merger deal. The company had earlier publicly stated
its opposition to the initial all-share merger proposal, agreed between the
two companies in February, which set the exchange ratio at 2.8 Glencore
shares for every one Xstrata share. In June, Qatar Holding expressed a
preference for a ratio of 3.25 Glencore shares per Xstrata share.
As of 1037 GMT Tuesday, Glencore last traded at GBP3.30/share ($5.25) on
the London Stock Exchange, up 1.04% from Monday's close, while Xstrata shares
were up 1.8% at GBP9.74 -- a ratio of 2.95.
Glencore, headquartered in Baar, Switzerland, is a commodities producer
and marketer involved in metals and minerals, energy products and
Zug, Switzerland-based Xstrata is one of the world's largest producers
of copper, zinc, nickel, cobalt, ferrochrome and vanadium. It is also the
world's largest exporter of seaborne thermal coal.
--Andy Blamey, firstname.lastname@example.org
--Edited by Jonathan Fox, email@example.com