Exclusive: Glencore Chief's New Olive Branch
The chief executive of Glencore, the commodities trading giant, has offered new concessions aimed at salvaging its £23bn takeover of Xstrata, the mining group.
I have learned that Ivan Glasenberg yesterday told the board of Xstrata that he would allow its executives to manage the mining assets of the combined company, easing fears about the future roles of dozens of senior managers. The pledge was designed to secure the backing of directors concerned about the oversight of assets that would generate 80% of the profits of the new group.
Mr Glasenberg addressed an Xstrata board meeting in Zug, Switzerland, in an effort to allay concerns about the future of the combined group, which would be the largest miner and commodities trader in the world.
The Glencore boss, who is a non-executive director of Xstrata, in which it owns a 34% stake, has not attended the miner's board meetings since an all-share merger was agreed earlier this year.
He was invited to address Xstrata's board meeting yesterday to offer further clarity about the operational and governance structure of an enlarged Glencore.
People close to the situation said he reassured Xstrata directors about the role of its senior managers - a subject that has caused concern among major shareholders. Mick Davis, Xstrata's chief executive, is to leave six months after the takeover, even though he had been lined up as the new company's boss in the original deal.
Mr Glasenberg this month increased Glencore's offer from 2.8 of its shares for each Xstrata to a ratio of 3.05 shares, but also changed the structure of the deal into a formal takeover.
Sources say that Mr Glasenberg did not address in detail the £170m in retention payments to 73 Xstrata managers that would be paid out over two years. These are expected to remain as part of the deal if Xstrata recommends it to its investors.
Such a recommendation looks increasingly likely, according to people close to Xstrata. If it is forthcoming, it would secure the backing of Qatar Holding, the Gulf-state's sovereign wealth fund, which owns 12% of Xstrata.
Xstrata, which has promised to announce its verdict on Glencore's proposal by September 24, declined to comment.