[miningmx.com] — XSTRATA has distanced itself from potential merger partner Glencore by naming industry outsider John Bond as chairperson.
Vodafone’s Bond will replace Willy Strothotte in May, severing one of Xstrata’s clearest ties with its biggest shareholder and potential buyer Glencore, which is mulling a possible stock market listing this year.
Strothotte, who has chaired Xstrata since 1994 and led it through its initial public offering nine years ago, doubles up as chair of Glencore, the world’s largest commodities trader.
Xstrata said the prospect of a Glencore IPO had prompted it to begin a search for his replacement last autumn
“Given this tenure and the board’s view that, if Glencore seeks a public listing, it would not be appropriate for the two companies to have the same chairman,” Xstrata said in an e-mailed statement.
An IPO could value Glencore at about $60bn, fuelling speculation that it is a first step toward a merger between Xstrata and Glencore. Xstrata investors have been wary of a link-up ahead of an IPO due to difficulties valuing Glencore’s diverse business.
If Glencore does pursue a deal with Xstrata, having Bond on board should help reassure investors worried about the close historic ties between the two companies.
But it could also cut short Bond’s tenure, as there has been speculation that a combined group would ultimately be chaired by Xstrata CEO Mick Davis.
OLD SCHOOL TIES
Although Strothotte is not the only Glencore nominated director on Xstrata’s board, with Glencore Chief Executive Ivan Glasenberg a non-executive director of the company, the outgoing chairperson looks to be the biggest loser from renewed merger talk.
The industry veteran is also on his way out at Glencore.
The privately held trading, mining and resource investment conglomerate has lined up one-time BP executive Rodney Chase as chair, the Sunday Times reported at the weekend. However, Glencore is still looking at a long list of candidates, a source familiar with the process said.
Strothotte was appointed chief executive of Glencore in 1993 and held the combined positions of chairman and CEO from 1994 until 2001, when the roles were split.
Glencore must restructure its board to meet corporate governance standards if it decides to go ahead with an IPO as it would not be able to proceed if it retained a chairperson who had also served as CEO. It also lacks independent directors.
Bond, a former chief executive and chairperson of HSBC, will join the board of Xstrata as a consultant with immediate effect and will step down from Vodafone’s board on July 26.