Glencore declares final bid offer as £21.8 billion to Xstrata

Written on:September 11, 2012
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Xstrata headquarters in Zug

Will Xstrata accept Glencore”s final terms?

Glencore”s chief executive Ivan Glasenberg put down his cards on display yesterday, as he made his final offer to mining company Xstrata of £21.8 billion ($35 billion), in an effort to gather as much support as possible for the Glencore – Xstrata merger.

With the revision in the bid from 2.8 of Glencore”s shares for every Xstrata share to 3.05 ratio, there is now an 80% probability of the merger to go through. Glencore presented the revised bid along with a condition which would see Xstrata CEO Mick Davis exit after six months, handing over the reins of the combined entity to Glasenberg, which scraps online casino the earlier plan of the Xstrata head taking control of the top job.

Mick Davis is willing to forgo his position provided the shareholders get the right bargain, a source aware of the situation said, adding that around 20 people may quit after the merger gets processed.

Under the original deal, Xstrata proposed retention payments totaling £172.8 million ($276 million) for Davis and 72 other executives. Those payments received severe backlash from investors including Standard Life Investments.

Glencore reiterated that it is “content” with Xstrata”s request for the payments. Glencore has asked Xstrata”s board if it needed an more revisions in the executive board payments which included £28.8 million in shares of the combined group to Davis over three years.

The proposal will continue to be considered as merger requiring the approval of 75% shareholders, with Glencore being unable to vote its stake. Glencore can switch to acquisition mode if it can garner more than 50% shareholders with the consent of the UK acquisition panel and Xstrata.

Glencore revised bid ousts Mick Davis from CEO role of merged entity


12 Comments add one

  1. Eric says:

    This merger will definitely have a nail-biting finish! Awaiting more updates

  2. David says:

    £172.8 million to retain executives! and there you go talking about resolving issues like poverty!

  3. Rupert says:

    Now the deal is likely to be a success

  4. Edmond says:

    Both parties seem to have lots of money!

  5. Samuel says:

    How about some charity Glencore?

  6. Rebecca says:

    This merger needs to go through for both the parties involved. It has turned out to be a suspense thriller. Let’s wait to see who wins.

  7. Ryan says:

    Now we need to check what other things are left to be opposed, Glencore can seal the deal, i guess.

  8. George says:

    Clever move by Glencore!

  9. Jason says:

    Cool! Now that’s a match everyone wants to see!

  10. Blake says:

    Mr. Glasenberg has made a goal! Awaiting reaction Xstrata

  11. Mr.Investor says:

    The merger will be successful but Glencore cannot gain enough support for an acquisition

  12. Martin says:

    Right now, Glencore has the upper hand, there are no more loopholes for the shareholders to point out. The deal is done…well almost!

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