PennyStockPayCheck.com Rss

Featured Posts

Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

Read more

Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

Read more

Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

Read more

Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

Read more

UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

Read more

Glencore boss may prevail if Bond share deal accepted

Category : Business

Glencore’s Glasenberg has been desperate to buy Xstrata for years and is not about to bow out just because a sovereign wealth fund is fighting for fair terms

Ivan Glasenberg, Glencore chief executive, rarely encounters people with deeper pockets than himself. He has now. Qatar Holdings, by buying 11% of Xstrata and declaring that the terms of Glencore’s merger proposal are too mean, has pinned him against a wall. Pay more or the deal is dead, is its blunt message to the multi-billionaire.

But pay how much more? The Qataris say a ratio of 3.25 Glencore shares for every Xstrata share would be a “more appropriate distribution of the benefits of the merger” than Glencore’s intended ratio of 2.8. OK, but is 3.25 a line in the sand or an opening pitch?

It’s impossible to know from the outside. The Qataris’ chief advantage has been surprise, and their best tactic now would be to keep Glasenberg guessing. In other words: tell him that support is guaranteed at 3.25; anything less and he’s taking a risk.

Qatar can be confident that the Glencore boss will go higher (and perhaps even to 3.25), whatever he said on day one about mergers of equals not requiring takeover premiums. The truth is that Glasenberg has been desperate to buy Xstrata for years and is not about to bow out just because a sovereign wealth fund, against form, has had the gumption to fight for fair terms.

That’s doubly true if Sir John Bond, Xstrata’s chairman, has eaten enough humble pie on the retention awards to persuade UK pension funds to back down. Bond’s latest version is a mess, it should be said. The awards for Xstrata’s top nine executives, including big boss Mick Davis, will be tied to performance but the payments to the other 64 managers won’t be. The nine will be asked to find cost savings of $350m (£225m) – but that’s a meaningless figure without knowing the intended level of the combined group’s capital expenditure.

Still, Bond has conceded that the retention payments should be made in shares, and not cash. That’s a big U-turn and may persuade some funds to hold their noses, even if the windfall for the executives, now it is denominated in stock, could soar beyond £173m.

For his next trick, Bond will have to explain why, having botched the retention issue and rolled over meekly on the original merger terms, he still deserves to chair Glenstrata, or even an still-independent Xstrata if that’s how the dust settles. Maybe Qatar also has an opinion on Bond.

Post a comment