Commodities trader Glencore seems to be digging in its heels on the price it is prepared to pay for miner Xstrata.
Glencore’s chief executive Ivan Glasenberg said it is a deal that they would walk away from. He implies he will not give in to Qatar’s sovereign wealth fund, a key Xstrata shareholder, which has demanded an improved offer.
Qatar has enough Xstrata shares – nearly 12 percent – to block the takeover at a shareholders’ meeting next month.
“We cannot understand the position of the Qataris, asking for more. We have seen nothing coming out of recent results that supports this. In fact we have seen quite the opposite,” Glasenberg said in an interview with Reuters. “It is not a must-do deal. It is a deal that we believe makes sense.”
While Glasenberg stopped short of saying he would definitely not raise the current offer, with three weeks to go before a September 7 vote, he said Glencore could walk away and return to the merger proposal in a year or two.
“It is unlikely anyone else will come and buy Xstrata, so it still sits there for us to look at some time in the future,” he said. “It is not as if it is a deal we are going to lose, or that is running away from us.”
Neither Glencore nor Qatar, who are buying Xstrata shares almost daily, have shown any sign of blinking in the stand-off, and while several analysts said it was too soon to write off the merger they also said the risk of collapse had now risen.