Smart money

7 September 2012 By Una Galani Follow @ugalani

If Qatar’s sovereign fund didn’t command respect before the Glencore-Xstrata saga, it certainly does now. Qatar has made Glencore boss Ivan Glasenberg budge on price. But its achievement is capped by the fact that it still hasn’t obtained a wholly acceptable proposal.

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Glencore, the Swiss commodities trader, proposed changes to the group’s $34 billion merger with Xstrata on Sept. 7.

Under the new terms, Glencore is offering to exchange 3.05 of its shares for each Xstrata share that it doesn’t already own. Glencore’s chief executive, Ivan Glasenberg, will also become the boss of the enlarged group instead of Xstrata head Mick Davis. The original exchange ratio agreed by both companies was 2.8.

Qatar Holding issued a statement in June saying that it believed an exchange ratio of 3.25 would offer “a more appropriate distribution of the benefits of the merger whilst properly recognising the intrinsic stand-alone value of Xstrata.”

Qatar owns a 12 stake in Xstrata. The Gulf fund is being advised by Lazard.

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