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Xstrata Holders to Vote on Glencore Deal in September

07/09/2012 | 04:25am US/Eastern

A shareholder vote on the proposed merger between U.K. miner Xstrata PLC (>> Xstrata PLC) and Swiss-based Glencore International (>> Glencore International Plc) will likely take place in September, people familiar with the matter told Dow Jones Newswires Monday.

The vote, originally slated to have been held last week, has been delayed due to changes in the retention packages for Xstrata management following shareholder pressure. Xstrata shareholders are also putting pressure on Glencore to increase the ratio of its shares it will pay for each Xstrata share from 2.8. Sovereign wealth fund Qatar Holdings, Xstrata's second biggest shareholder, has publicly stated it would like Glencore to pay 3.25 shares for each Xstrata share, a position reiterated last week in London by Qatar's Prime Minister.

Qatar Holding could potentially block the deal if a few other large shareholders join forces with the sovereign wealth fund to vote against the deal. A no vote by just over 16% of Xstrata's shareholders would prevent it going through.

The move from cash to share payments contingent on performance, means the retention packages are now viewed by the European regulator to include an element of long-term incentivisation which requires Xstrata to reconvene a new meeting.

The miner has to give at least 24 days' notice, with the new vote now slated to take place in September after the two firms issue their first half results. Glencore's vote will be held around the same time.

Xstrata is expected to include details of the new vote date in a supplementary scheme circular this week, the people said.

The merger would create the world's fourth largest mining company with a market capitalization of $58 billion and assets in a wide range of commodities including base and precious metals, agriculture and oil.

Xstrata declined to comment.

Write to Andrea Hotter at andrea.hotter@wsj.com

Stocks mentioned in the article : Xstrata PLC, Glencore International Plc
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