As Xstrata Shareholders Balk Over Deal, Activist Calls for Shakeup

Xstrata shareholders have a lot to say about Glencore's $30 billion takeover offer.

On Friday, the activist investor Knight Vinke reiterated it would vote against Glencore's current bid. The financial firm added that if the deal fell apart, it would push to overhaul the Xstrata board to “make it more independent and robust.”

“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 â€" and one which would be likely to attract a significant premium were there subsequently to be interest from third parties,” Knight Vinke wrote in a statement.

Knight Vinke is among the many Xstrata shareholders that have come out against the deal, which will come to a vote next week.

On Thursday, Qatar Holding, the sovereign wealth fund of the Persian Gulf nation, said that it supported “the principle” of the deal, but it didn't like the terms. Qatar is a powerful voice in the debate, with more than 12 percent of Xstrata's shares. A Norweigan fund is similarly opposing the proposal, according to The Financial Times.

The investors are looking for Glencore to sweeten its offer. The commodities giant is offering 2.8 of its shares for every Xstrata share. But Qatar Holding has said it is looking for a ratio of 3.25 to 1.

Qatar Holding “believes that Xstrata has a strong future, whether in combination with Glencore on acceptable terms or as a stand-alone entity, and that its shares represent an attractive long-term investment,” the sovereign wealth fund wrote in its statement.

So far, Glencore has balked at raising its offer for the mining company. In late August, Ivan Glasenberg, the chief executive of Glencore, rebuffed the idea, saying, “It's not the only deal that can be done.”