Glencore Gets Court Approval for Structure of Xstrata Vote Plan

A U.K. court approved share reclassification and voting plans for Glencore International Plc’s proposed takeover of Xstrata Plc, including a provision that allows shareholders to go ahead with the merger without a management compensation plan.

Registrar Clive Jones in London today signed off on the scheme of arrangement for the exchange of shares and a shareholder vote to be held by Xstrata in Switzerland. The takeover is still subject to a shareholder approval and further legal clearance from a U.K. court.

Xstrata is the target of a $32.5 billion bid by Glencore, the year’s largest takeover. The merger, five years in the making, would couple Glencore’s trading operations with Xstrata’s coal, copper and zinc mines, creating a group with 130,000 employees in more than 40 nations.

The purpose of the hearing in London today was to get initial approval for the terms of the deal, a “sanity check,” said Xstrata lawyer Andrew Thornton.

Xstrata shareholders will be given four voting options: to reject or approve the deal, to approve it only with a management compensation plan to retain key executives, or to approve it only without the compensation plan, Thornton said.

The takeover can proceed without specific approval of the “management incentive arrangement,” he said.

Xstrata, based in Zug, Switzerland, recommended on Oct. 1 that shareholders vote in favor of a sweetened Glencore offer.

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