Pressure grows on Sir John Bond as Glenstrata deal falters


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The Independent Online

Pressure is growing on Sir John Bond to step down as chairman of the mining giant Xstrata if as expected its £53bn merger with Glencore is voted down this week.

Institutional shareholders are questioning how Sir John can remain chairman when the deal which had the full backing of Xstrata's board fails.

They have asked whether he held out for good enough terms in the deal, which saw Xstrata shareholders offered 2.8 Glencore shares for each Xstrata share they owned.

It is the second time in two years that Sir John, who spent 45 years at HSBC, eventually becoming the bank's chairman, has come under fire in his role as chairman of another FTSE 100 company.

In 2010 he stepped down from the chair of Vodafone after six years in the job under increasing criticism from shareholders that the mobile giant was failing to produce growth.

Glencore holds a 34 per cent stake in Xstrata but it is unable to vote this block at this week's shareholder meeting. That means that Qatar, which has bought a 12 per cent stake in recent months, can almost single-handedly defeat the deal, which needs 75 per cent shareholder backing.

Analysts believe it is highly unlikely that Glencore will improve the ratio of shares it is offering. Ivan Glasenberg, pictured, the chief executive, recently highlighted the fact that Xstrata's profits have fallen far more sharply in the first half of 2012 than his own company's. He also said that he was prepared to wait several more years to do the deal, which has already been five years in the planning.

Sir John only became chairman of Xstrata in May 2011 and the board is likely to resist calls for his departure so soon.