Xstrata investor refuses to budge

Glencore, Xstrata’s top shareholder with an almost 34 per cent stake, is offering 2.8 new shares for every Xstrata share held.

Qatar – whose sovereign wealth fund has built an 11 per cent stake in Xstrata since the planned takeover was announced in February – is demanding an improved ratio of 3.25.

“I cannot talk about it because it’s under negotiation now, but what I can say is our position is firm,” Sheikh Hamad bin Jassim al-Thani, the Qatari prime minister who is also chairman of Qatar Holding, said.

“We look after Xstrata and all the shareholders of Xstrata, and we think it’s good to merge the two companies. It will be positive for both sides, but at the right price.”

Qatar has held shares in Xstrata since January last year, but has been building its position aggressively since the Glencore takeover was announced in February.

It surprised the market last week, after months of silence, with a rare public demand for an improved offer.

Glencore and Qatar, now a key stumbling block in the path of the trader’s ambition to create a mining and trading powerhouse, have already held talks and more negotiations are due.

But sources said yesterday there was little sign of either party shifting. If Qatar refuses to back the deal and Glencore does not yield, the tie-up would be put on ice for this year at least.