Multibillion-dollar investment house Qatar Holding confirms it will vote against Glencore’s proposed £53bn merger with Xstrata
Qatar Holding, the multibillion-dollar investment house, has intensified its standoff with Glencore chief executive Ivan Glasenberg by confirming that it will vote against the commodity trader’s proposed £53bn merger with Xstrata next week.
The Middle Eastern investment fund, which has aggressively built a 12% stake in Xstrata, definitively refused to support the deal on Thursday, having said in June that it wanted an increase on the offer of 2.8 Glencore shares for each Xstrata share.
In a statement to the Stock Exchange, the investor said: “QH announces that, although it continues to support the principle of a combination of Glencore with Xstrata, it has determined that it will not support the proposed merger terms of 2.8 new Glencore shares for every existing Xstrata share. Accordingly, QH will vote its entire shareholding in Xstrata against the proposed scheme and merger terms.”
The statement all but kills off the deal in its current form after it emerged this week that Norges Bank Investment Management, which had also been building its stake in Xstrata, also plans to vote against the tie-up when shareholders are polled on 7 September.
Glencore could still increase its offer and cause the meeting to be deferred, although such a move would represent a huge embarrassment for Glasenberg, who has insisted that he will not increase it as he claims to be agnostic about whether the deal is completed immediately or not.
As it stands, next week’s meeting must still go ahead, with the Xstrata board continuing to recommend that its shareholders accept a bid they are almost certain to reject. The Xstrata board, which will receive a £300m break fee from Glencore if the deal is voted down, is legally obliged to retain its recommendation except in the unlikely circumstances of receiving a competing bid or a material change in Glencore’s circumstances.