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.