Xstrata boss in line for £8m payout

GlencoreThe boss of Xstrata is reportedly in line to receive a pay-off of at least £8 million and receive company shares worth up to £30 million if commodities trader Glencore succeeds in its bid for the mining giant.

Xstrata chief executive Mick Davis is set for the payout if Glencore boss Ivan Glasenberg pushes through his revamped takeover bid for the miner unveiled on Friday, the Sunday Telegraph said.

Glencore tore up plans for a merger after failing to agree with investors on the value of Xstrata's shares compared to Glencore's, opting instead for an outright takeover bid that would see Mr Davis replaced by Glencore chief executive Mr Glasenberg.

However, the payouts would reportedly be far lower than the retention agreements agreed by the Xstrata board for Mr Davis and other company executives when the two firms were considering a merger, which could have seen up to £200 million paid in bonuses to Xstrata's executives.

Xstrata had lined up a payout of as much as £75 million for Mr Davis as part of the agreed deal, with another £144 million put aside for payments to 72 other key executives.

Glencore, whose announcement shocked the market on Friday, has been told by the Takeover Panel to provide more detail on its plans to buy Xstrata.

Glencore's new bid is at a 17% premium to Xstrata's share price and shareholders were understood to be divided on whether this was enough to persuade them to back it.

Qatar Holding, the sovereign wealth fund which used its blocking stake to derail the original merger, has reportedly agreed that Glencore's increased £34.66 billion offer was high enough.

However, the sovereign wealth fund was surprised by Glencore's new terms and the trader's intention to remove much of Xstrata's board, including Mr Davis.

The deal would create the world's fourth-biggest natural resources firm, worth 90 billion US dollars (£56 billion).
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