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GLENCORE/XSTRATA MERGER: Road to tie-up may not be smooth
February 08, 2012 - 10:46 GMT
Location:
London
KEYWORDS:
Glencore
,
Xstrata
,
anti-trust
,
South Africa
,
Standard Life
,
Schroders
The announcement of the agreed merger between Glencore and Xstrata, made on Tuesday February 7, is not necessarily a guarantee that it will go ahead, sources have said.
At least two Xstrata shareholders have already spoken out against the terms of the deal, and only about 16% will need to rebel for it to be blocked.
Standard Life, which holds about 2% of Xstrata’s shares, and about 0.3% of Glencore’s, issued an official statement confirming its intention to oppose the deal.
“Although we see some merit in the merger of Xstrata and Glencore, the proposed exchange ratio clearly undervalues Xstrata’s assets and future earnings contribution,” David Cumming, head of equities at Standard Life Investments, said in the statement.
“Consequently, it is our intention to vote against the deal, unless the merger terms for Xstrata shareholders are materially improved.”
Asset management company Schroders, which holds about 1.4% of...
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Euromoney Institutional Investor PLC.
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