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| Version 4 | Version 5 |
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| Xstrata board backs Glencore merger | Xstrata board backs Glencore merger |
| (35 minutes later) | |
| The board of mining group Xstrata has recommended that shareholders back the merger terms offered by commodities trader Glencore. | The board of mining group Xstrata has recommended that shareholders back the merger terms offered by commodities trader Glencore. |
| Shareholders will now vote on whether to accept the offer of 3.05 Glencore shares for every Xstrata share. | Shareholders will now vote on whether to accept the offer of 3.05 Glencore shares for every Xstrata share. |
| Glencore had raised its offer after its first bid was opposed by key Xstrata shareholders, including Qatar Holding, the Gulf state's sovereign wealth fund. | Glencore had raised its offer after its first bid was opposed by key Xstrata shareholders, including Qatar Holding, the Gulf state's sovereign wealth fund. |
| A merger would form one of the world's biggest metals and commodities firms. | A merger would form one of the world's biggest metals and commodities firms. |
| "The strategic rationale for combining Xstrata and Glencore remains highly compelling," said Xstrata's chief executive Mick Davis. | "The strategic rationale for combining Xstrata and Glencore remains highly compelling," said Xstrata's chief executive Mick Davis. |
| "A merger will fuse the respective strengths of the two companies into a unique natural resources company. It will also resolve Xstrata's ownership structure in a way that I believe will create a superior shareholder value as part of a larger, more diverse company with an enhanced ability to grow and create value for its owners." | "A merger will fuse the respective strengths of the two companies into a unique natural resources company. It will also resolve Xstrata's ownership structure in a way that I believe will create a superior shareholder value as part of a larger, more diverse company with an enhanced ability to grow and create value for its owners." |
| Glencore boss Ivan Glasenberg said he was "pleased" Xstrata directors had recommended the deal, "which offers Xstrata shareholders a significant premium [on the current share price]". | Glencore boss Ivan Glasenberg said he was "pleased" Xstrata directors had recommended the deal, "which offers Xstrata shareholders a significant premium [on the current share price]". |
| In late morning UK trading Xstrata's shares were up more than 3%. Glencore's were less than 1% higher. | In late morning UK trading Xstrata's shares were up more than 3%. Glencore's were less than 1% higher. |
| Revised structure | Revised structure |
| When Glencore had made its original offer of 2.8 Glencore shares for every one Xstrata share in February, Qatar Holding, which owns a 12% holding in Xstrata, had said that it wanted an offer of 3.25 shares. | When Glencore had made its original offer of 2.8 Glencore shares for every one Xstrata share in February, Qatar Holding, which owns a 12% holding in Xstrata, had said that it wanted an offer of 3.25 shares. |
| Concerns were also raised about the proposed management structure of a merged company. In response, it was agreed that Mr Davis would become chief executive for six months before being replaced by Mr Glasenberg. | Concerns were also raised about the proposed management structure of a merged company. In response, it was agreed that Mr Davis would become chief executive for six months before being replaced by Mr Glasenberg. |
| Mr Davis would then step down from the board, with another Xstrata executive taking his place, "to preserve the majority of Xstrata directors on the board". | Mr Davis would then step down from the board, with another Xstrata executive taking his place, "to preserve the majority of Xstrata directors on the board". |
| Xstrata shareholders will therefore vote on two resolutions. The first is to approve the Glencore offer subject to the revised management structure being passed. | Xstrata shareholders will therefore vote on two resolutions. The first is to approve the Glencore offer subject to the revised management structure being passed. |
| The second is to approve the offer without the management structure being passed. | The second is to approve the offer without the management structure being passed. |
| Xstrata said its independent non-executive directors only intended to recommend unanimously the first resolution. | Xstrata said its independent non-executive directors only intended to recommend unanimously the first resolution. |