Friday, Sep 07, 2012
LONDON--Diversified mining Group Xstrata PLC (XTA.LN), said Friday that it has written to Swiss commodities giant Glencore International PLC (GLEN.LN)), to request clarification of the outline proposal provided to the Xstrata Board immediately prior to the Xstrata Court Meeting and New Xstrata General Meeting today in Switzerland.
MAIN FACTS:
The Proposal lacks sufficient information on key elements;
-On receipt of a detailed proposal the Board will carefully consider its merits and in particular whether it would represent a takeover of Xstrata by Glencore.
-The Independent Directors note: The proposed exchange ratio of 3.05 represents a premium of 17.6% to the undisturbed Xstrata share price on Feb. 1 2012 and 22.2% to the closing price on 6 September, which is significantly lower than would be expected in a takeover
-The Proposal contains as a condition the ability for Glencore at their sole discretion to structure the transaction as a takeover offer in contrast to the current recommended scheme of arrangements where that discretion currently lies with Xstrata
-The intention to replace Mick Davis as CEO and to amend the management incentive arrangements represents significant risk around the retention of the Xstrata senior and operational management intended to be responsible for approximately 80% of the combined group's earnings and represents a fundamental change to the governance structure which underpinned the agreed merger of equals announced on Feb. 7.
-On receipt of a detailed proposal, the Independent Directors will consult with shareholders and consider whether to reconvene the shareholder meetings and recommend what action shareholders should take.
-Xstrata shares at 1417 GMT up 48 pence, or 4.9%, at GBP10.27, valuing the company at GBP29.40 billion.
-Write to Razak Musah Baba at razak.baba@dowjones.com
(END) Dow Jones Newswires
07-09-12 1418GMT
