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Glencore ups offer for Xstrata

September 7, 2012

Commodities trader Glencore has increased the number of shares it wants to offer Xstrata shareholders for their stock in a bid to salvage its takeover bid of the mining giant. The deal has come at the last minute.

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Image: picture-alliance/dpa

Glencore was offering 3.05 new shares for every Xstrata share and proposed a change to the structure of the deal, now worth $37 billion (29.2 billion euros), Anglo-Swiss mining giant Xstrata said Friday.

The offer is higher than the 2.8 new shares previously offered by Glencore, and has come after what Glencore chairman Simon Murray said were "overnight developments" in the merger talks.

In addition, Glencore was suggesting a possible change to the structure of the deal, allowing Xstrata's board to force through the merger more easily in the face of opposition from some of its shareholders

Under the original deal, the holders of just 16.5 percent of Xstrata shares would have needed to vote against the tie-up for the deal to collapse.

Glencore's bid had been teetering on the brink of collapse after Xstrata's second-largest shareholder, Qatar, said last week it would vote against the deal unless it was improved. Qatar has a 12 percent stake in Xstrata. Other shareholders had rallied behind Qatar's demand.

Swiss-based Glencore already owns a 34 percent stake in Xstrata and has long coveted a full merger to create a global commodities giant worth 69.8 billion euros.

uhe/slk (Reuters, AFP, dpa)