Qatar sovereign fund builds Xstrata stake

Qatar’s sovereign wealth fund has increased its stake in Xstrata to just over five percent, potentially making it easier for commodities trader Glencore to buy the Anglo-Swiss miner.

The Gulf state, a keen commodities investor, is now Xstrata’s third-largest shareholder behind Glencore and asset manager BlackRock Inc, giving it exposure to a metals powerhouse after missing out on other recent deals. Qatar has also bought stakes in luxury goods house LVMH and oil company Total, in a spending spree using its natural gas riches to diversify economic risk. It also owns shares in Credit Suisse and Harrods department store.

Several major shareholders oppose Glencore’s $41bn bid for Xstrata but bankers said Qatar would be a passive investor, unlikely to stand in the way. The deal must be backed by 75 per cent of shareholders excluding Glencore.

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A Dubai-based banker said: “Getting the Qataris on board will be good for Glencore. They are not activist investors and won’t be looking at gaining management influence. But they are opportunistic and won’t commit a pound unless they are seeing clear benefits.”

Regulatory filings showed that the Qatar Investment Authority built up its Xstrata holding, worth $2.65bn at current prices, through stock market transactions from around three percent when Glencore announced its bid.

No comment on the holding was immediately available from the Qatar fund.

Glencore plans to buy Xstrata in an all-share transaction.