Glencore, Xstrata Investors to Vote Nov. 20 on Merger

Investors in Glencore International Plc (GLEN) and Xstrata Plc (XTA), the commodity companies seeking to complete a $33 billion combination by the end of the year, are scheduled to vote on the plan on Nov. 20.

Shareholders will receive supplementary circulars, detailing a revised takeover offer, the two Switzerland-based companies said in statements today.

Xstrata on Oct. 1 recommended its investors vote in favor of a sweetened Glencore offer that will create the world’s fourth-largest mining company, coupling Glencore’s trading units with Xstrata’s production sites. Glencore raised its all-share bid last month following opposition from Xstrata investors including Qatar’s sovereign wealth fund.

Shareholders with as little as a combined 16.5 percent of Xstrata would be able to block the deal. U.K. takeover rules prevent Glencore from voting its 34 percent Xstrata stake to decide on the deal, which requires 75 percent approval.

Qatar Holding LLC, which owns 12 percent of Zug-based Xstrata and is the largest shareholder behind Glencore, opposed the commodity trader’s initial offer of 2.8 shares for each one in Xstrata, even after Xstrata’s board recommended it. Glencore Chief Executive Officer Ivan Glasenberg raised his bid to 3.05 shares on Sept. 7.

Investors will be asked to consider two resolutions: One to approve the takeover along with 144 million pounds ($232 million) of retention bonuses, and a second that excludes the pay question, Xstrata said Oct. 1. The outcome of a third vote, on the incentive payments alone, will determine which of the first two resolutions is taken into account.

If the vote on the retention package is approved by 50 percent of investors, the deal’s success rests on the first resolution; if the payments are rejected, the second resolution determines the outcome. Both require 75 percent approval. Xstrata’s independent directors unanimously recommended that shareholders approve the bid and the bonuses.

Glencore, based in Baar, fell 0.1 percent to close at 343.1 pence in London. Xstrata dropped 0.7 percent to 968.6 pence.

To contact the reporters on this story: Jesse Riseborough in London at jriseborough@bloomberg.net; Firat Kayakiran in London at fkayakiran@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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