By Alex MacDonald
LONDON--Activist investment fund Knight Vinke Asset Management
said Friday that it intends to vote against the current merger
proposal between commodities titan Glencore International PLC
(GLEN.LN) and Anglo-Swiss miner Xstrata PLC (XTA.LN) unless the
terms are, "materially improved."
Knight Vinke, Xstrata's 21st-largest Xstrata shareholder with a
0.51% stake according to FactSet, joins two other large
shareholders who reaffirmed Thursday their plans to vote against
the current proposal to create a mining behemoth with a market
capitalization of about $68 billion, based on current share
prices.
Qatar Holding, Xstrata's second largest shareholder after
Glencore with a 12.3% stake, and Mr. Richard Buxton, the fund
manager of the Schroder U.K. Growth Fund, a unit of Schroder
Investment Management Ltd, said Thursday they will vote against the
current offer to swap 2.8 Glencore shares for every Xstrata share.
Schroder Investment Management Ltd owns a 1% stake in Xstrata.
The three entities alone could potentially block the deal in a
Sep 7 shareholder vote. Shareholders representing just over 16% of
Xstrata's share capital need to vote against the deal in order to
scuttle it at a meeting on September 7. Glencore, which owns a 34%
stake in Xstrata, isn't allowed to vote.
"If the board of Glencore is unwilling to pay for acquiring the
control it seeks, we would support Xstrata's continuing
independence as a fundamentally strong and successful business--and
one which would be likely to attract a significant premium were
there subsequently to be interest from third parties," said David
Trenchard, Knight Vinke Investment Management's Vice-Chairman.
"Should the transaction fail to be approved, we intend to
consult with other shareholders regarding the composition of the
Xstrata Board, so as to make it more independent and robust," he
added.
-Write to Alex MacDonald at alex.macdonald@dowjones.com
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