Investor to push for Xstrata board break-up

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The Independent Online

Knight Vinke, the activist investor, has become the first shareholder in Xstrata to declare it will push for a shake-up of the miner's board if its £30bn takeover by Glencore collapses next week.

With investors expected to block the proposed takeover at a vote next Friday, the 0.5 per cent shareholder reiterated its opposition to the deal unless the terms are "materially improved".

"If the board of Glencore is unwilling to pay for acquiring the control it seeks, we would support Xstrata's continuing independence as a fundamentally strong and successful business... Should the transaction fail to be improved, we intend to consult with other shareholders regarding the composition of the Xstrata board to make it more independent and robust."

Under the terms of the agreed deal, Glencore would give Xstrata investors 2.8 of its shares for each one of theirs. However, a raft of major investors, including 12 per cent shareholder, Qatar, say they will vote against the deal unless the price is hiked to around 3.25. Although Glencore chief executive Ivan Glasenberg hasn't categorically ruled out raising his offer, he has indicated that he won't and is running out of time if he plans to.

Richard Buxton, the head of UK equities at Schroder Investment Management, which has a 1 per cent stake in Xstrata, said: "I think this deal is dead in the water. Unless Ivan is prepared to go to 3.25, the deal is dead." Glencore declined to comment.

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