Swiss diversified miner Xstrata Plc has sought one-week extension to decide on commodity giant Glencore International Plc's revised $36-billion merger proposal, continuing the uncertainty over the seven-month-long efforts to create a global natural resources behemoth.
In a statement, Xstrata said an extension has been granted by the takeover panel and that the independent non-executive Xstrata directors will announce their response on 1 October 2012.
Xstrata, which was expected to respond to the proposal on Monday, said the extension was requested to enable Xstrata's independent non-executive directors to take full account of feedback from consultation with key shareholders of the company.
In a last-ditch attempt to save the deal from collapse, a fortnight ago Glencore upped its offer to $36 billion or an exchange ratio of 3.05 shares of Glencore for every Xstrata share in place of the original ratio of 2.8 shares. However, Xstrata initially responded stating that the revised offer is significantly lower than expected. (See: Swiss miner Xstrata finds Glencore's new offer too low)
Xstrata's second-largest shareholder, Qatar's sovereign wealth fund, had earlier indicated an exchange ratio of 3.25 share of Glencore for every share of Xstrata. It is still uncertain whether Qatar Holding will support the deal.
It is understood that some shareholders of Xstrata want assurances that the company's existing operational strategy will continue, despite the change in its CEO as proposed in the revised offer.