Qatar sticks to plan to vote down $ 31 bn Xstrata bid

LONDON: Qatar Holding, the second-largest investor in Xstrata, warned it would not veer from its stated intentions and would vote down rival investor Glencore’s all-share offer for the miner unless the terms are improved.
By casting its vote against the $31 billion bid, Qatar, with a 12.3 percent share in Xstrata, will virtually single-handedly block the long-awaited deal and put paid to Glencore’s ambitions of creating a mining and trading behemoth, at least for now.
In what is only its second public statement on the deal and its first since voicing opposition in June, Qatar did however confirm its support for the tie-up itself, leaving the door open to a last minute improvement to the current terms from Glencore.
Glencore could change its offer as late as the morning of the shareholder meeting on the deal, scheduled for Sept 7, though the vote itself would then be postponed.
“Although it continues to support the principle of a combination of Glencore with Xstrata, (Qatar) has determined that it will not support the proposed merger terms of 2.8 new Glencore shares for every one existing Xstrata share,” it said.
The investment arm of the Gulf state’s sovereign wealth fund said it would vote its entire shareholding against the deal when shareholders meet next week in Zug, Switzerland.
Qatar, which has spent some 3 billion pounds building its stake in Xstrata since February, surprised investors in June when it said it would not support a deal below 3.25.
Glencore, for its part, said last week it was sticking to its guns, warning the deal was not a “must do.”
“The deal at 2.8 is dead in the water,” one source familiar with the transaction said earlier.
“But the Qatari wording has been carefully chosen — they like the merger idea.”