Scaling mount Glencore

28 February 2008 By John Foley Follow @johnsfoley

The Brazilian miner has offered $87bn for its UK rival. But Swiss trader Glencore, Xstrata s biggest shareholder, has balked at the terms. It s a cautionary tale of what happens to other investors when a big shareholder pursues its own agenda.

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Talks between Vale, the Brazilian mining group, and UK rival Xstrata, over a potential takeover have reached an impasse after Vale failed to win the support of Xstrata's biggest shareholder, according to people familiar with the situation.

Glencore, a Swiss metals trader, owns 35% of Xstrata. As part of any deal, it is understood to want marketing rights for Vale's nonferrous metal output for a ten year period. Vale instead offered a fiveyear contract, excluding future projects.

According to UK takeover regulation, Xstrata's independent shareholders would be allowed to vote on any sidedeal with Glencore.

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