[miningmx.com] – SHAREHOLDERS advisory groups are split on
recommending the proposed $33bn merger of Swiss trading group Glencore with
Xstrata, the UK-listed diversified mining, Bloomberg News reported.
On November 20, shareholders of both companies vote on the merger that has been
rumbling on through much of 2012. The latest version of the merger proposal gives
shareholders the right to support the merger without sanctioning controversial
executive retention salaries that were part and parcel of an earlier merger iteration.
Bloomberg News said that Pensions & Investment Research Consultants (PIRC)
recommended shareholders oppose the deal owing to a lack of due diligence and
Board independence.
However, Institutional Shareholder Services (ISS) and Glass Lewis encouraged
investors to support for the takeover, although they called for the resolution on
retention bonuses to be voted down.
“Given the complexity of the Glencore business, PIRC would have liked to have seen
evidence of more extensive due diligence,’ Bloomberg quoted the adviser as saying.
PIRC advises institutional investors with combined assets exceeding £1.5 trillion ($2.4
trillion). “Additionally, the level of independent representation on the Board is
insufficient,’ it said.
“The 22% premium implied by Glencore’s revised offer appears reasonable in the
circumstances, taking into account the size of Glencore’s current stake in Xstrata,’ ISS
said. “The strategic rationale offers some net upside to Xstrata, and the simplification
of the shareholder structure is a compelling point.’
