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Xstrata won't add £5bn sweetener

Reuters | Sun, 12 Jul 2009 20:50
[miningmx.com] -- MINING group Xstrata remains committed to a nil-premium merger with Anglo American, the company said on Sunday after a newspaper said it will offer a £5bn ($8.1bn) sweetener to seal the deal.

The Observer newspaper cited sources as saying Xstrata would raise the money via a rights issue because its debt-laden balance sheet had made it difficult to justify further borrowings.

But Xstrata said in a statement sent to Reuters its proposal "remains a nil premium merger of equals, in which both companies' shareholders will share equally the substantial benefits that are uniquely available from a merger."

It added "the proposal bears none of the characteristics of a takeover, in which a premium would typically be payable."

Anglo's shareholders are in favour of a merger deal in principle but want better terms than the nil-premium, all-share merger that Xstrata proposed in June, the Observer said.

The report also said Xstrata was willing to consider taking a smaller stake in the enlarged company.

Xstrata has been mulling its options after Anglo last month rejected proposals for a merger that would have created a mining giant valued at more than £40bn pounds.

Anglo last week appointed veteran industrialist John Parker as chairman to help bolster its leadership as it seeks to fend off the unwanted Xstrata approach.



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