Jan. 28 (Bloomberg) -- Xstrata Plc, the world's fourth- largest copper producer, rose to a three-week high in London trading after newspaper reports that Cia. Vale do Rio Doce may agree to buy the company within the next few days.

Zug, Switzerland-based Xstrata gained 12 pence, or 0.3 percent, to 3,512 pence on the London Stock Exchange, the highest since Jan. 4, valuing the company at 34.3 billion pounds ($68 billion). Xstrata is 34.45 percent-owned by Glencore International AG, the world's largest commodity trader.

``Xstrata won't sell for less than 50 pounds per share,'' Tobias Woerner, an analyst at MF Global Securities in London, said today in a telephone interview. ``The deal also needs approval from Glencore, Xstrata's management and Xstrata's shareholders, any of whom could derail it.''

Vale, the world's biggest iron-ore miner, arranged $50 billion in financing from a group of up to 12 banks led by HSBC Holdings Plc to fund its bid for Xstrata, the U.K.'s Sunday Times reported yesterday, without citing anyone.

Vale said on Jan. 21 it had held talks to buy Xstrata. The Rio de Janeiro-based company's Chief Executive Officer Roger Agnelli, who wants Vale to overtake BHP Billiton Ltd. as the world's biggest mining company, is already spending $59 billion over five years to expand in Canada, Mozambique, Australia and China.

Brazilian Opposition

Xstrata may also become a takeover target for Anglo American Plc, the world's second-largest mining company, Daniel Fairclough, an analyst at Merrill Lynch in London, wrote in a report published today.

``Xstrata is the `king-maker' and we believe Anglo American would not let Vale take it out without a fight,'' Fairclough wrote today in a research note. He rates the stock a ``buy'' and has a 12-month price estimate of 4,000 pence.

The Brazilian government is against Vale taking over Xstrata as it considers the offer expensive and harmful to the country's interests, local newspaper Valor Economico said Jan. 24, citing an unidentified minister.

``Clearly Vale is looking to diversify and utilize the company's strong earnings growth,'' John Meyer, an analyst at Fairfax I.S. Plc in London, said today in a telephone interview. ``A deal could be done for between 35 pounds and 45 pounds.''

Claire Divver, a London-based spokeswoman for Xstrata, declined to comment on the speculation. Glencore spokeswoman Lotti Grenacher in Baar, Switzerland, also declined to comment.

To contact the reporter on this story: Mark Herlihy in London at mherlihy1@bloomberg.net.

Last Updated: January 28, 2008 12:31 EST