LONDON Qatar Holding LLC
plans to vote against the merger of Xstrata Plc and Glencore
International Plc in a meeting of shareholders to be held Sept.
7, the company said.
The Qatari sovereign wealth
fund, which now holds an 11.67-percent stake in Zug,
Switzerland-based Xstrata, said it wont support the
merger at the current ratio of 2.8 Glencore shares for
every Xstrata share.
While Qatar Holding "continues
to support the principle of a combination of Glencore with
Xstrata, it has determined that it will not support the
proposed merger terms," the Doha-based fund said.
As such, the company "will vote
its entire shareholding in Xstrata against the proposed scheme
and merger terms at the scheme meeting and extraordinary
general meeting of Xstrata," it said.
Qatar Holding "believes that
Xstrata has a strong future, whether in combination with
Glencore on acceptable terms or as a standalone entity, and
that its shares represent an attractive long-term investment,"
the fund said.
The widespread market consensus
has been that Baar, Switzerland-based Glencore wouldnt be
able to secure the merger without pushing up the proposed share
Qatar Holding called for a ratio
of 3.25 Glencore shares for every Xstrata share at the end of
June, immediately prompting doubts about the success of the
Now that the company has
officially said that it will vote against the transaction, the
deal is believed to be dead in the water.
Several other shareholders,
including Schroders Plc, Standard Life Plc and Vinke Asset
Management LLC, have said they see the offer as too low and
have also pledged to vote against the merger. That means it
might be impossible for Glencore to reach the required 75
percent in favor.
Glencore chief executive officer
Ivan Glasenberg was adamant during a presentation of the
companys first-half results on Aug. 21 that 2.8 shares
was a fair offer and that there were no plans to increase that
Glencore declined to