Xstrata pushes back shareholder vote giving Glencore more time
Unpopular retention deals for top executives also forced the miner to reschedule a meeting set for this week.
By CFOWorld staff | CFO UK | Published 09:30, 11 July 12
Xstrata set a date of 7 September for its shareholders to vote on the planned Glencore takeover, giving the commodities trader more time to hammer out a deal with a rival shareholder.
The FTSE100 miner pushed back the voting date after changes to unpopular retention deals for top executives forced it to reschedule a meeting set for this week.
A new date had been expected after deals to tie in Xstrata's top managers were overhauled at the end of last month, following shareholder backlash over mostly non-performance related cash packages.
But a vote on 7 September, later than strictly required, will also give Glencore, Xstrata's largest investor, six more weeks to agree a deal over the terms of the takeover with shareholder Qatar Holding, which is demanding better terms - easing speculation that the current deadlock between the two could put the tie-up on ice.
While the September date is still moveable, sources familiar with the matter and analysts said it marked a deadline of sorts and a goal for the talks between Glencore and Qatar's sovereign wealth fund, which owns 11 percent of the miner.
Qatar, which has built the second-largest stake in the miner, said last week it was firm in its demand for Glencore to improve its offer to 3.25 new Glencore shares for every Xstrata share held, up from the 2.8 on offer.
Glencore, for its part, has indicated it could walk away.
Under takeover rules, Glencore has until two weeks before the vote date to alter the terms of its offer - a later move is possible but would push the date back again.
Xstrata - which was caught in a "shareholder spring" that has seen investor protest over pay across sectors - said on Wednesday its new retention packages for top executives would be in shares only and be dependent on executives reaching a further $300 million of cost savings beyond planned synergies.
Xstrata also said it continued to expect the merger to complete in the fourth quarter.
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