London, England — MININGREVIEW.COM — 31 July 2009 – Swiss-based Xstrata – the fifth largest diversified metals and mining company in the world – is due to post sharply lower first-half profits next week, and is expected to hold back from using the occasion to launch a new initiative in its wooing of Anglo American
Xstrata was sharply rebuffed by Anglo after it approached its rival with a "merger of equals" proposal last month.
“We expect Xstrata to reiterate its belief in the strategic rationale of a combination with Anglo. We do not anticipate any new information,” said analyst Sam Catalano at Macquarie.
Most major Anglo shareholders have rejected Xstrata’s proposal, saying a premium of 30 to 50% was needed, but Xstrata is not expected to offer a premium next week.
The company has said it was committed to the concept of a nil premium deal since it regards the two groups as similar in size, and has said privately it was prepared for a long process.
Anglo is due to post results today, and both sides are expected to use their presentations to highlight how they have expertly navigated a downturn that has hammered earnings.
Xstrata is expected to post underlying earnings per share of 33.6 cents when it reports on Tuesday, according to the average forecast of nine analysts polled by Reuters.
That would be a drop of 89% from reported EPS of US$2.95 last year, or a fall of 80% when the previous figure is adjusted for the company’s US$5.9 billion R45 billion) rights issue.