Glencore confirms new Xstrata bid terms

Xstrata's independent directors have concerns about the new offer from Glencore

Commodities giant Glencore has officially confirmed the terms of its improved merger offer to mining group Xstrata, made on Friday.

Under the new terms, Xstrata boss Mick Davis would head the combined group for six months before making way for Glencore's Ivan Glasenberg.

Glencore has offered 3.05 of its shares for each Xstrata share, up from its original offer of 2.8 shares.

The commodities trader said it would not increase the offer further.

It maintains the offer represents a merger proposal, not a takeover bid.

In response, Xstrata said it would confirm whether or not it would be putting Glencore's offer to its shareholders by the morning of 24 September.

Doubts

The deal remains conditional on the support of Xstrata shareholders, some of whom have questioned the revised terms.

Qatar Holding, which owns about 12% of Xstrata, has said it wants an offer of 3.25 Glencore shares for every one Xstrata share.

On Friday, Xstrata's independent directors also raised doubts about the offer.

In a statement, they said the new proposals represented "a fundamental change to the governance structure which underpinned the agreed merger of equals" initially announced in February.

In particular, they highlighted the move to make Mr Glasenberg chief executive of the combined group.

They added that the new ratio of Glencore to Xstrata shares on offer represented a premium "significantly lower than would be expected in a takeover".

Takeover offers usually involve a higher bid than mergers.