Xstrata Share Discussion Threads

[ch1ck] 12/9/2012 09:21

This deal is worth 1170p for XTA shares acording to a specialist on Bloomberg yesterday.

I bought a stack today as reports are coming throught that the board will recommend this to share holders and the big players are on board.

Looks looks like a fairly safe bet to me but each to his own.

[redartbmud] 11/9/2012 20:41

careful

I tend to agree, except for the fact that a key component of Glen's strategy is the T/o of Xta, unless I am mistaken. I have no idea of their reasoning.
I have not researched this as much as I should. I am an existing Xta holder, so am innocently caught up in the action as a result. Normally I would undertake more detailed research, but as my holding and vote will not influence the outcome I am taking a relaxed stance, except for the fact that I see the timing as opportunistic on the part of Glen.
As I have a view on their well documented amoral activities I will undoubtedly sell out when the T/o or merger completes.

red

[careful] 11/9/2012 12:40

i would have thought that glen could manage without xta, better than the other way around.
glen have an interesting portfolio of assets including their 34% of xta.
also their huge turnover (an eye watering $186bn), is mainly because they are established traders with the infrasture that is required.
This isolates them to a large extent from a downturn in commodity prices.
traders should make money even when prices are low.

[sanks] 11/9/2012 12:06

I'm still waiting for the break below £7 to test that £4.97 area

[redartbmud] 11/9/2012 09:45

careful

Yes, but does Xta need Glen as much as Gllen needs Xta?
Xta can survive under it's own steam.

Will the sum of the new whole be greater than that of the parts?

red

[careful] 11/9/2012 09:43

glen hold 34% of xta.
there is no need for them to overpay.
miners could be in for a difficult time.
remember (not long ago) xta at below £5, or Rio at below £10.
we have such short memories.

the trouble with miners is that it costs a fortune to get the stuff out of the ground and when the prices fall (as now) they are soon in trouble.

[rallycry] 11/9/2012 08:47

Glen left it open that they would if required change the terms of the merger to a takeover if required. This shows they intend to get XTA by any means possible. In the coming days everything will be clearer as XTA directors need to announce if they support the merger and then if they do Qatar will more than likely back the deal as well. Then it is deal done and everyone moves on.

[redartbmud] 11/9/2012 08:36

I don't think Glen can let it go, as T/o Xta integral to their long term strategy.
They need to engineer a deal on the best terms they can get.

red

[redartbmud] 10/9/2012 09:20

Offer is still derisory, I will vote against.

[careful] 10/9/2012 08:59

the coal price is low, iron ore low...all miners will struggle to make any money,
as always over supply, too much production.
try to remember these are businesses in the long term, not gambling chips.

[arja] 10/9/2012 08:55

actually it's a poor offer as XTA has much better long term prospects than GLEN. Holding 34% they feel they should not have to pay much more than current XTA price to take it over or a merger which is nonsense really .

[rallycry] 10/9/2012 08:47

Looks like it. Shareholders will probably go for this as its now not a bad offer.

[arja] 10/9/2012 08:44

if so , the share price would be over £11 although I hope you are right and a good stock for trading too at present if you are quick on your feet !

[wattene] 10/9/2012 08:23

XTA have until the 24th Sept to respond. I think it is now a done deal.

[leedskier] 10/9/2012 07:15

TIDMGLEN

RNS Number : 8519L

Glencore International PLC

10 September 2012

10 September 2012

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

NEWS RELEASE

Glencore International plc

Merger Update - Glencore's Proposal to Xstrata

As required by the Takeover Panel, Glencore International plc ("Glencore") announces that over the weekend it made the following proposal (the "Proposal") to the independent board of Xstrata plc ("Xstrata"). The Proposal remains subject to the agreement of the Xstrata board.

1. Increased merger ratio to 3.05
An increased merger ratio of 3.05 New Glencore Shares for each Xstrata Share, excluding the Xstrata Shares already held by the Glencore Group. Glencore confirms that it is an all-share merger and it will not increase the merger ratio further.

The increased merger ratio represents a substantial premium for a company with a 34 per cent. shareholder. At the close of business on Wednesday 5 September 2012 (being the last business day prior to any speculation of a change to the terms of the Merger), Glencore and Xstrata were trading at an exchange ratio of 2.4x. That would imply a premium of more than 27 per cent. would be paid with the new proposed merger ratio.

2. Governance
In order to provide clarity on the issue of CEO succession, Mick Davis will become the Chief Executive Officer and executive director of the Combined Group on the Merger becoming effective but to step down within 6 months with Ivan Glasenberg becoming Chief Executive Officer of the Combined Group at that time.

All other governance arrangements set out in Xstrata's scheme document and Glencore's class 1 circular and prospectus, each published on 31 May 2012, would remain the same.

3. Management Incentive Arrangements
The Merger to remain conditional on independent Xstrata shareholders approving appropriate management incentive arrangements for Xstrata management and senior employees.

Glencore has confirmed that it is content with Xstrata's request for Xstrata management and senior employees to receive appropriate retention and incentive packages. Glencore has asked the independent Xstrata board to consider what (if any) changes they would propose to the retention and incentive arrangement packages set out in Xstrata's supplementary scheme circular dated 8 August 2012, to ensure that they are acceptable to independent Xstrata shareholders.

4. Structure
The Merger would continue to be structured as a Scheme and Glencore could switch to a takeover offer with the consent of the Panel and Xstrata.

For the avoidance of doubt, as noted above, these terms are subject to the agreement of the Xstrata board.

[careful] 09/9/2012 12:29

perception is all in todays market, with the current mood causing huge short term positions to be taken by high frequency traders in miners and banks last week.
..but the problems are not solved.

[rallycry] 09/9/2012 10:46

Looks that either way everyone sees value in XTA. The whole sector flew on Friday with the announcement of massive investment by China and over the weekend US/Russia etc have all announced their support for growth. Hopefully this will positively affect the markets on Monday morning.

XTA looks well placed now as Glencore one way or another will get control of XTA. XTA were criticised for their lock in pay for their directors etc but when this was changed Glen was criticised for not doing it and removing it from their offer? Seems very strange to me.

I was quite negative on XTA early last week but it is looking much better now for share to rise either with or without Glen. With Glen takeover, short term highs and without long term highs. Only my opinion but it fascinating to watch.

[troutman2] 09/9/2012 07:53

Tony Blair involved now ?.
Wonder what his wodge will be ?.
If it means a better share price fine ?, if they want they can bring in Roland Rat for all I care if it leads to better terms for the share holders, fine.

[inki] 07/9/2012 16:54

Glencore could obtain just 51% and control the company - which the Xstrata directors would not enjoy.
Problems seem to have been hindered at many stages by Xstrata directors - requiring ridiculous sums - blowing out of proportion the importance of bonuses - the next one will be Sir Bond stating that the terms of a merger are different to a takeover where Mr Davis an important player changes the value of a takeover. Xstrata is a Global Group of Assets incorporating People and Tanglibles. No one man is too important, and if he is, then that is a risk that needs countering.

[arja] 07/9/2012 16:21

maybe you are right then - but not sure why it would cause a steep drop although may recover a bit by the close ?

[leedskier] 07/9/2012 16:20

Under the new terms, Glencore has the ability to restructure the deal as a takeover offer, rather than the scheme of arrangement it previously put forward. A takeover offer requires just over 50% shareholder support, rather than the 75% needed under a scheme of arrangement.

The new terms have already won the approval of some shareholders. David Cumming, head of equities at Standard Life Investments – which holds 1.4% of Xstrata and 0.8% of Glencore – said: "We are supportive of the improved terms and the changes to the executive governance arrangements. The deal will, we believe, enhance the growth prospects of the combined group and consequently, as shareholders both of Xstrata and Glencore, we are pleased with the proposed outcome."

[rallycry] 07/9/2012 15:43

Well if it isn't that then its a very strange coincidence that at exactly that time the share price dipped.

[arja] 07/9/2012 15:37

not caused by that and by the time small PI's get the news it is old news .