Xstrata board extends deadline to respond to Glencore’s improved offer

British miner Xstrata Plc (LON:XTA) said its independent non-executive directors had extended to 1 October from 24 September the deadline for their response to the increased, final takeover offer from Swiss suitor Glencore International Plc (LON:GLEN) to ensure more time for feedback from the company’s key shareholders.

The request was made by both, Xstrata and Glencore and granted by the UK’s Takeover Panel, the companies said.

The Swiss commodities trader announced on 10 September its final revised offer for Xstrata comprising an exchange of 3.05 own new shares for each Xstrata share, up from the 2.8 exchange ratio agreed in February.

Glencore’s last minute move came after in late August, Qatar Holding with over 12% in Xstrata said it would not accept the terms proposed in February. As the initial transaction was structured, if 16.5% of Xstrata’s shares voted against it, it would have collapsed.
Both companies postponed their shareholders meetings scheduled for 7 September to vote on the deal.

Attached to the increased takeover offer, Glencore also proposed that Xstrata’s current CEO Mick Davis became the CEO of the combined group at the completion of the deal, but he should step down within six months after that and be replaced with Glencore’s current CEO Ivan Glasenberg.

The structure of the transaction will remain a scheme, with the possibility for Glencore to change it into a takeover offer with the approval of the target company and the Panel, the buyer also said.

Under the terms agreed in February, Glencore, owner of 34% in Xstrata, would take the British miner private.

The planned merger is expected to create the world’s fourth biggest diversified natural resource company and a top producer and marketer of 18 commodities, benefiting from larger scale and diversity in the global resources industry, Glencore and Xstrata said at announcing their tie-up in February.

China to decide on Glencore’s acquisition of Canada’s Viterra next month

Canadian grain handler Viterra Inc (TSE:VT) said the Chinese Ministry of Commerce (MOFCOM) will continue into September with the review of its planned CAD6.1bn (USD6.2bn/EUR4.9bn) combination with Swiss commodities trader Glencore International Plc (LON:GLEN).

The clearance by the MOFCOM is the sole remaining regulatory nod needed to wrap up Glencore’s acquisition of Viterra, the Canadian firm said. Glencore is cooperating with the Chinese ministry to secure its approval as soon as possible.

The buyer initially expected to complete the deal in Viterra’s fiscal third quarter, it has said.

Glencore agreed on 20 March to buy Viterra at CAD16.25 a share, saying it would use existing cash and debt to finance the deal which would serve its goal of becoming a top global player in grain and oilseeds markets.

The deal provides Glencore with a strategic platform for growth in Canada, while boosting its operations in Australia and allowing it opportunities to expand in fast-developing global markets, the buyer has said.

In an earlier comment, Chris Mahoney, director of Glencore’s Agricultural Products division, said the takeover reflected the Swiss group’s belief in the potential of the Canadian and Australian grain markets and the benefits for farmers and customers in the two countries, as well as others.

Viterra has operations in Canada, the US, Australia, New Zealand and China, as well as offices in Japan, Singapore, Vietnam, Switzerland, Italy, Ukraine, Germany, Spain and India.

Glencore International takes control of Congolese Mutanda

Swiss commodity trader Glencore International Plc (LON:GLEN) on Tuesday said it had increased its indirect interest in Congolese Mutanda Mining Sprl to 60% and gained control over the operations of the copper and cobalt producer, which it aims to combine with its Kansuki miner.

Glencore achieved the indirect control of Mutanda by buying additional 24.49% in Samref Overseas SA from High Grade Minerals SA (HGM) and a further 1% in Samref Congo Sprl from Groupe Bazano Sprl in two separate deals worth a combined USD340m (EUR266.3m).

Apart from the equity bought, Glencore has also acquired shareholder debt owed to HGM in the value of around USD140m, the buyer said.

The deal gave the Swiss group a stake of 74.49% in Samref Overseas.

Subject to terms of a put and call option, Glencore can buy the rest of Samref Overseas from HGM between 15 December and 31 December 2013 for a total cash price of USD430m, the buyer said.

The move is in line with Glencore’s announced plan to tie up Mutanda and Kansuki, in a first stage of the expansion of the combined mining operations.

Mutanda is a high-grade copper and cobalt producer operating in the Democratic Republic of the Congo’s province of Katangain. Glencore has a life of mine off-take agreement for all of Mutanda’s copper and cobalt production with pricing based on LME.