Xstrata PLC said shareholders will vote on Sept. 7 on the miner’s planned $26-billion takeover by Glencore, effectively giving the commodities trader and rival investor Qatar Holding six weeks to hammer out an agreement on the terms of the offer.
A vote initially scheduled for July was postponed after shareholder protests forced Xstrata last month to overhaul retention packages to tie in its top managers. Shareholders had objected to the mostly cash deals that were not linked to performance, and threatened to scupper the deal.
But a vote on Sept. 7, later than strictly required, will also give Glencore, Xstrata’s largest investor, more time to strike a deal with Qatar’s sovereign wealth fund, 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, which owns 11 per cent 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, roughly Aug. 24, to alter the terms of its offer – a later move is possible, but would push the date back again.
Glencore’s own shareholders will also vote on Sept 7.
Xstrata – which was caught up in a “shareholder spring” that has seen investors protest over pay across sectors – confirmed 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.
Antitrust reviews were progressing, the miner said, with an ongoing process in China and South Africa and constructive discussions with the European Union ahead of a formal notification, expected in coming weeks.
The combination of Glencore and Xstrata was expected to be an acquisition powerhouse, as both have a track record of growing through deals.
Glencore announced, separately on Wednesday, it would buy Brazilian miner Vale’s European manganese ferroalloys operations for $160-million, moving into the production of a key steel making ingredient.
“This small transaction is characteristic of Glencore’s opportunistic and piecemeal M&A strategy and it marks its first foray into manganese production,” analyst Dominic O’Kane at Liberum said in a note.