Qataris take stake in Xstrata above 10%

http://www.guardian.co.uk/business/marketforceslive/2012/jun/07/qatar-xstrata-glencore-sovereign

Version 0 of 1.

Qatar's sovereign wealth fund has increased its stake in miner Xstrata, sending shares in the company, and its soon-to-be partner Glencore, up more than 3%.

Xstrata was up 28p at 968p and Glencore up 13.5p at 348p.

The Qataris have been quietly building their stake in the company nearly every day since the Glencore bid was announced in February and means the Middle Eastern oil-rich fund now owns 10%.

The merger, which will be put to shareholders next month, had been on shaky grounds last week after it emerged £240m will be paid to executives from both sides in the deal.

Xstrata will pay 73 managers £172m between them, with chief executive Mick Davis getting a £29m retention package – all of which has angered some shareholders who have threatened to vote the merger down.

But the Qataris are well-known for voting with the boards of companies they have stakes in, meaning with today's purchase the deal is one step closer to going through.

Before the announced merger, the Qatar sovereign wealth fund had a less than 3% stake, but following the purchases it will own over 6% of the combined company making it the second-biggest shareholder behind Glencore boss Ivan Glasenberg.

One suggestion why Davis needs such a big retention package – which is paid over three years with few performance targets – is so he can look billionaire Glasenberg in the eyes.

Meanwhile Glasenberg used part of his $110m final dividend payment to boost his share count by buying an extra £10m-worth. He now owns 15.8%.