Xstrata likely to walk away from Anglo: top investor
Mining group Xstrata has told a top-10 shareholder that it would likely abandon its pursuit of rival Anglo American, the investor said on Monday.
They have pretty much indicated to us that they will be walking away, the investor, who declined to be named, told Reuters.
They (Xstrata) think that with the new Anglo chairman coming in, they don't think they have enough support really to press and they feel there is no point in making it hostile.
British regulators issued a ruling on October 2 requiring Xstrata to make a formal takeover offer by October 20 or undertake not to return before April.
Xstrata are just going to wait for six months and see if things deteriorate from an Anglo perspective (or) if Anglo Chairman John Parker changes his view. We think this is unlikely, the investor said.
A combination of Xstrata and Anglo American would create the world's biggest producer of zinc, platinum, coal for power stations and ferrochrome, and the second-biggest company in coal for steelmaking and in copper.
Another top-10 investor also said Xstrata would not press ahead.
We believe Xstrata will walk away. They have made it pretty clear that the terms (for Anglo) are what they are and they are not willing to sweeten them.
Anglo Chairman Parker held a round of consultations with shareholders about Xstrata's nil premium merger proposal, which the firm called totally unacceptable on June 22, the day after Xstrata made the offer.
In August, Anglo shareholders told Reuters they backed Parker and were willing to give him time to deliver on a cost savings plans.
At 1142 GMT (7:42 a.m. EDT), Xstrata shares were up 2.1 percent to 973 pence while Anglo shares added 1.6 percent to 2,186 pence, compared to a 1.3 percent increase in the UK mining index.
(Editing by Karen Foster)
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