BHP Billiton eyes deals as Glencore boss woos critics

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The Independent Online

The head of the world's biggest mining company, Australia's BHP Billiton, yesterday said he was ready to add further fuel to the deal frenzy gripping the commodities sector in the wake of Glencore's planned $90bn (£57bn) merger with Xstrata.

Marius Kloppers, chief executive, told Australian television he had "absolutely no doubt" that BHP would continue its buying spree after shelling out $16.9bn on shale-gas assets last year.

The value of global mining deals overall swelled to $96bn last year from $76bn in 2010 – the highest since before the credit crunch struck in 2007.

The merger of Glencore and Xstrata will create the world's fourth-biggest mining firm behind BHP, Rio Tinto and Brazil's Vale, although Mr Kloppers was tight-lipped on specu- lation that BHP is eyeing its own swoop for Anglo American.

Mr Kloppers has so far failed to pull off a game-changing acquisition after a hostile bid for Rio Tinto was thwarted by global recession in 2008 and competition authorities scuppered a $40bn move for Canada's Potash Corporation in 2010.

Prospects for the Glencore and Xstrata merger face a crucial week as an increasing number of major investors come out publicly against the tie-up. Fidelity was the latest shareholder to oppose the merger terms as significantly undervaluing Xstrata last week as institutions seek a bigger premium for their shares.

Under the terms of the deal, Xstrata shareholders will receive 2.8 Glencore shares for every one of their own, representing an 8 per cent premium to the current price rather than the 20 per cent aimed for by investors.

Glencore cannot vote its 34 per cent stake in Xstrata and it would take only 16.4 per cent of the miner's remaining shareholders to vote down the deal.

Glencore's billionaire boss Ivan Glasenberg, who irked major investors by not making himself available to answer questions on the deal, will try to win over critics this week when he joins Xstrata's chief executive, Mick Davis, in an investor roadshow.