Glencore's Glasenberg calls Xstrata's bluff

The tale of Glencore's proposed acquisition of Xstrata has more twists than a Mills & Boon novel. In the latest chapter, Glencore CEO Ivan Glasenberg has decided to play hard ball. 'It is not a must-do deal,' he says. 'It is unlikely anyone else will come and buy Xstrata, so it still sits there for us to look at some time in the future.'

by Rebecca Burn-Callander
Last Updated: 09 Oct 2013
Glasenberg has been working on this deal for nearly a year, announcing his takeover intentions in February. Since then, he has invested many man hours and a fair wedge of cash in the project. Last month, however, Xtrata's second-largest investors - the Qataris - balked at Glencore's terms. They want more than 2.8 new shares for each Xstrata shares.

It's a pretty canny/underhand move (depending on which side you're on) coming so late in the day. And the Qataris have made absolutely sure that the deal is frozen without their consent, increasing their stake in Xstrata to 12% from the 3% owned when acquisition negotiations began.

Rather than panic, however, Glasenberg has taken a more nonchalant stance: 'It is not a must-do deal,' he says. 'It is not as if it is a deal we are going to lose, or that is running away from us.' And indeed, with his commodities giant owning a 34% stake in Xstrata, it's not as if anyone else can make a play for the thing.

Will the Qataris up the ante? Or will they swoon and fall into his arms? MT will fill you in on the next chapter as the story progresses.

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