Several large investors have threatened to block Glencore and Xstrata’s proposed all-share merger, which would create a $90bn commodities giant in the largest global mining deal on record.
Opponents of the deal said yesterday that the offer of 2.8 Glencore shares for every Xstrata share undervalued the miner of thermal coal, copper, nickel and zinc. Glencore, the world’s largest commodities trader, would end up with a 55 per cent stake in the combined group.
Standard Life, the miner’s fifth-biggest shareholder with a holding of about 2 per cent, said it would vote against the deal. “Although we see some merit in the merger of Xstrata and Glencore the proposed exchange ratio clearly undervalues Xstrata’s assets and future earnings contribution,” said David Cumming, head of equities. Standard Life also owns a 0.3 per cent stake in Glencore.