Reuters reported that shareholders in Xstrata have given qualified approval to a revised bid from Glencore.

Miner Xstrata gave its long awaited blessing to trader Glencore’s revised USD 33 billion offer, though only on condition shareholders also support a controversial pay package aimed at retaining key managers for at least two years.

Xstrata’s non executive directors have been considering the improved, final, offer from Glencore, the miner’s largest shareholder, since September 10 wrestling for three weeks to reconcile opposing demands from shareholders over the deal terms, the board and a more than USD 226 million) retention package.

Glencore was forced to raise its offer last month to 3.05 new shares for every Xstrata share held, from 2.8, after opposition from rival Xstrata investor Qatar threatened to sink the long held plan to create a mining and trading powerhouse.

Glencore’s conditions, however, included placing its own chief executive and top shareholder, Mr Ivan Glasenberg, at the helm of the combined group at the expense of Xstrata veteran Mr Mick Davis, who had been due to take the job but will now leave.

On Monday, Xstrata confirmed it had bowed to rebel shareholders’ demands on pay, as widely expected, and effectively split a vote on the package to retain key managers from the main vote on the merger both had been linked in the original proposal.

But the board, which would have found it difficult not to support a higher offer from Glencore, stuck to its guns on retention and reiterated its concern that without Xstrata’s management in place to guide its pipeline of projects, “the value proposition of the combined entity is at risk”.

It recommended, it said, that shareholders back both the deal and the pay package.

Source - Reuters

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