By Alex MacDonald
LONDON--Shareholders of Anglo-Swiss miner Xstrata PLC (XTA.LN)
should vote against the proposed merger with commodities titan
Glencore International PLC (GLEN.LN), independent U.K. shareholder
advisory group PIRC said Wednesday, on the grounds that
shareholders don't have adequate assurances that the transaction
was subject to an appropriate level of objective scrutiny.
PIRC said that excluding Xstrata's non-executive chairman, only
four of Xstrata's 12 board directors are considered to be
independent in accordance with its guidelines. It also noted that
Glencore, a major Xstrata shareholder with a 34% stake, has
appointed three non-executive directors to Xstrata's board,
including Glencore Chief Executive Ivan Glasenberg.
PIRC also noted that certain Xstrata executive board members are
due to receive incentive benefits upon the deal's completion.
"On the basis of these concerns, opposition is recommended,"
PIRC said.
Glencore and Xstrata are currently seeking shareholder and
regulatory approval for a merger of equals that aims to create the
world's fourth largest diversified miner with a market
capitalization of about $70 billion, based on current share
prices.
Write to Alex MacDonald at alex.macdonald@dowjones.com
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