LONDON--Glencore International PLC's (GLEN.LN) attempt to form
the world's fourth-largest mining conglomerate by acquiring Xstrata
PLC (XTA.LN) edged closer to collapse Thursday after Xstrata's
largest shareholder, sovereign wealth fund Qatar Holding LLC, said
it would vote against a deal at the current offer price.
In its second public statement since Glencore and Xstrata
announced their merger of equals to create a mining juggernaut with
a market capitalization of about $70 billion, Qatar Holding said,
"it has determined that it will not support the proposed merger
terms of 2.8 new Glencore shares for every one existing Xstrata
share...although it continues to support the principle of a
combination of Glencore with Xstrata."
Qatar owns a 12.3% stake in Xstrata, enough to potentially block
the deal if other shareholders that have also voiced opposition to
the merger join it in voting against it on Sep 7.
Qatar first called on Glencore to sweeten its offer in June,
when it publicly stated that 3.25 Glencore shares for every Xstrata
share was a more appropriate value. However, Glencore's Chief
Executive and largest shareholder, Ivan Glasenberg, said last week
that he thinks the current terms are attractive and said he hasn't
come across any information that would support a higher
valuation.
Xstrata's shares closed down 2.5% or 23 pence at 901 pence a
share while Glencore's shares closed down 3% or 11 pence at 357
pence a share.
-Write to Alex MacDonald at alex.macdonald@dowjones.com (Ian
Walker contributed to this story.)
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