Xstrata sets September date for Glencore vote



LONDON // Xstrata said shareholders will now vote on Sept. 7 on the miner's planned $26 billion takeover by Glencore, after changes to unpopular retention deals for top executives forced it to push back a meeting scheduled for this week.

A new date had been expected after deals to tie in Xstrata's top managers were overhauled at the end of last month, following shareholder protests over mostly cash packages that were not tied to performance.

But a vote on Sept. 7, later than strictly required, will also give commodities trader Glencore, Xstrata's largest investor, six more weeks to hammer out a deal over the terms of the takeover with rival shareholder Qatar Holding, which is demanding better terms - easing speculation that the current deadlock between the two could put the tie-up on ice.

While the September date is still moveable, sources familiar with the matter and analysts said it marked a deadline of sorts and a goal for the talks between Glencore and Qatar's sovereign wealth fund, which owns 11 percent of the miner.

Qatar, which has built the second-largest stake in the miner, said last week it was firm in its demand for Glencore to improve its offer to 3.25 new Glencore shares for every Xstrata share held, up from the 2.8 on offer.

Glencore, for its part, has indicated it could walk away.

Under takeover rules, Glencore has until two weeks before the vote date to alter the terms of its offer - a later move is possible but would push the date back again.

Xstrata - which was caught in a "shareholder spring" that has seen shareholder protest over pay across sectors - said on Wednesday its new retention packages for top executives would be in shares only and be dependent on executives reaching a further $300 million of cost savings beyond planned synergies.

Xstrata also said it continued to expect the merger to complete in the fourth quarter.

Antitrust reviews were progressing, the miner said, with an ongoing process in China and South Africa and constructive discussions with the European Union ahead of a formal notification, expected in coming weeks.

The combination of Glencore and Xstrata was expected to be an acquisition powerhouse, as both have a track record of growing through deals.

Glencore announced, separately on Wednesday, it would buy Brazilian miner Vale's European manganese ferroalloys operations for $160 million, moving into the production of a key steelmaking ingredient.

"This small transaction is characteristic of Glencore's opportunistic and piecemeal M&A strategy and it marks its first foray into manganese production," analyst Dominic O'Kane at Liberum said in a note.

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