Glencore firms up Xstrata bid – by Clara Ferreira-Marques and Dinesh Nair (Reuters/Sudbury Star – September 10, 2012)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

LONDON — Trader Glencore, hammering out a revised $36-billion bid for miner Xstrata in intense weekend negotiations, is set to detail its new offer to the market as early as Monday, days after proposing 11th-hour changes to save the deal.
Sources familiar with the deal said commodities trader Glencore, keen to clarify its own position but also under pressure from Xstrata and U.K. regulators, would publish details of the higher offer early next week.
Two sources said the new, firm, offer was expected on Monday. The firm offer will then be studied by Xstrata’s board and non-executive directors — who on Friday questioned Glencore’s new proposal and said they required more details in order to decide on whether or not to recommend it. The Xstrata board will also discuss the proposal with top independent shareholders, one other source familiar with the deal said.
The deal has implications for Sudbury. Xstrata owns Xstrata Nickel, whose Sudbury operations consist of the Nickel Rim South Mine, Fraser Mine, a mill and a smelter. Nickel and copper are the primary metals, but cobalt and precious metals such as platinum are also produced. Xstrata employs about 1,000 people in the Sudbury area.
Glencore, the world’s largest diversified commodities trader and Xstrata’s largest shareholder with a stake of 34%, made a long-awaited takeover bid for the miner in February. But the offer ran into trouble in recent months and was expected to fail as shareholders prepared to vote on Friday, after number two shareholder Qatar and other investors opposed the terms of the deal, while Glencore refused to yield.
Living up to chief executive Ivan Glasenberg’s reputation as an unpredictable negotiator, however, a higher proposal from Glencore was announced just minutes before the miner’s shareholders met to cast their ballots on the existing offer.
Friday’s fresh proposal, disclosed to the market by Xstrata, included an increase in the offer to 3.05 new shares for every Xstrata share held, up from 2.8.
Conditions, however, also include the appointment of Glasenberg as chief executive of the combined group, at the expense of Xstrata boss Mick Davis.
Davis, who has shares in Xstrata worth some 25 million pounds ($40 million), will miss out on a bumper three-year retention package worth almost 30 million pounds if the deal spells the end of his decade-long stint at Xstrata.
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