HomeBase MetalsGlencore must win over reluctant investors to Xstrata takeover

Glencore must win over reluctant investors to Xstrata takeover

London, England — MININGREVIEW.COM — 05 March 2012 – The world’s largest diversified commodities trader, Glencore “’ which has agreed to a US$37 billion takeover of global diversified mining group Xstrata plc “’ says the deal is a “logical” next step for the two businesses, but has given no hint that it could sweeten its offer to win over reluctant investors.

The Swiss-based company, which released estimated 2011 earnings last month alongside news of the planned tie-up, confirmed those results, with net income up 7% to US$4.06 billion on a 28% rise in revenue. It will pay a total dividend for the year of US$0.15 per share.

Glencore is offering 2.8 new shares for every Xstrata share it does not already own “’ roughly 66% of the company. The offer is currently worth around 1,176 pence per Xstrata share, compared to Xstrata’s closing price on Friday of just 1,196.5 pence.

The Glencore takeover of Xstrata would lead to the creation of a major natural resources group with a combined equity market value of US$90 billion and a unique business model, fully integrated along the commodities value chain, from mining and processing, storage, freight and logistics, to marketing and sales.