LONDON - A last-minute phone call may have pulled the mega-merger of Glencore and Xstrata back from the brink of collapse, according to a person with direct knowledge of the matter.
Ivan Glasenberg, Glencore's chief executive, reopened talks with Qatar Holding, the Persian Gulf country's sovereign wealth fund, on Thursday night, the person said, who spoke on the condition of anonymity because he was not authorized to speak publicly.
Qatar, which owns 12 percent of Xstrata shares, had threatened to block the deal at a shareholder vote on Friday morning. For three months it has held out for a better offer from Glencore, which in February agreed to exchange 2.8 of its shares for every share in Xstrata.
Qatar's opposition galvanized other Xstrata shareholders, who also were disgruntled about the deal terms. Together, they were on the verge of blocking a merger that would combine Glencore, the world's biggest trader of commodities from wheat to aluminum, with Xstrata, one of the world's biggest miners of copper and coal.
Simon Murray, Glencore's chairman, adjourned the Glencore shareholder meeting shortly before it was due to begin on Friday morning in Zug, Switzerland.
Developments have “happened very recently overnight,†Mr. Murray told shareholders and journalists who had gathered for the vote.
Glencore is “considering its options and will update the market in due course,'†the company said in a statement on Friday morning.
A banker to one of the two companies, who spoke on condition of anonymity, confirmed that Glencore had reentered negotiations with Qatar, which has held out for a ratio of 3.25 Glencore shares for every Xstrata share.
The banker declined to specify Glencore's latest proposal. But if Glencore “bumps†to a merger ratio higher than 2.8, the company will “still want something in return,†the banker said, adding that “this is all about face-saving.â€
Glencor e requested the London stock exchange to halt the trading of its shares on Friday pending a market update. But one hour after the request, shares were still trading.
Glencore already owns 34 percent of Xstrata, one of the world's biggest multinational mining companies. Glencore's initial public offering last year, which was the biggest stock market listing by value in the history of the London exchange, paved the way for an Xstrata merger.
The companies have considered a merger several times over the past five years, most recently in the months leading up to the flotation, according to a person with direct knowledge of the matter, who spoke on the condition of anonymity because he was not authorized to speak publicly.
Mr. Glasenberg said last month it was “no big deal†if Qatar's opposition quashed the Glencore-Xstrata merger. Until last night, he had held firm in public that no change of terms was forthcoming.
