Qatar boosts stake in Xstrata to 6.3% ahead of Glencore merger deal

21/04/2012 07:59 AST

Qatar’s sovereign wealth fund has increased its stake in Xstrata to nearly 6.3% from 5% just 10 days ago and is now the second-largest holder in the miner ahead of its proposed $48.4bn merger of equals with Glencore International.

The QIA’s latest build makes any attempt to block the deal more difficult. Many Xstrata shareholders are pushing for a better deal than the one on the table, in which Glencore will give 2.8 shares for each of Xstrata’s shares.

The transaction would give the combined company a market capitalisation of around $90bn at the time the deal was announced.

Qatar started building its stake in Xstrata as Glencore made its move at the beginning of February. Having bought an initial 3.08% stake, the sovereign wealth fund continued to add to its shareholding and registered its last dealing April 19 to bring its total stake to 6.296%, or 189,050,381 shares.

The QIA’s latest build puts it ahead of BlackRock Inc, which has a 5.43% stake, and second only to Glencore, which has a 33.65% stake. It is also some way ahead of other major holders such as Schroders, Standard Life Investments Ltd and Royal London Asset Management.

Xstrata governance rules, intended to protect minority shareholders, bar Glencore from voting its stake, which means that just over 16% of Xstrata shares have to vote against the deal to block it.

Qatar has made an aggressive push into France in recent months. Last month, Qatar Holding, the overseas investment arm of the sovereign fund, said it had bought just over a 1% stake in French luxury goods group LVMH Louis Vuitton Moet Hennessy and bought a 2% holding in French energy giant Total accumulated over several months.

The QIA is also a 5.2% shareholder in US high-end jeweller Tiffany & Co according to an earlier press report that said the QIA had acquired its position last year and reported it this year in a Securities and Exchange Commission filing.

Gulf Times