The world's biggest mining deal hangs in the balance as Xstrata shareholders vote today on a controversial takeover proposal by Glencore.
The outcome of the vote, to be held at a theatre in the Swiss city of Zug, will determine if a US$72 billion (Dh264.46bn) mining and trading behemoth spanning Australia to Argentina comes to life.
The vote also has repercussions for Abu Dhabi, as the investment vehicle Aabaris a cornerstone investor in Glencore. Qatar Holding, a major shareholder in Xstrata, announced in June that it would block the merger unless more favourable terms were offered.
Besides the Qatari sovereign wealth fund, a number of other Xstrata shareholders have emerged to oppose the all-share takeover offer of 2.8 Glencore shares for every one of Xstrata.
Sanford C Bernstein, a Wall Street research firm, said last week a "fair exchange" would be at 3.16 times. Qatar has said it would approve a merger at 3.25.
"Should the merger be concluded successfully below 3.16 times, Glencore offers, in our view, a 'cheap' way of accessing the fundamental upside we see in Xstrata's assets," Paul Gait, an analyst at Bernstein, wrote in a research note.
"However, given the rich exchange ratio demanded by Xstrata's largest shareholder, we question whether the merger can be completed at this point, implying some near-term downside risk for Glencore's stock should the deal collapse."
Yesterday, the share price of both companies rose in London afternoon trading as hopes for a merger waned. Glencore rose by 5.45 pence to 394.95 pence a share, while Xstrata rose 14.60 pence to 949.70 a share. Xstrata shares are trading at 2.40 times to every one of Glencore, a 14 per cent discount to the proposed takeover price.
For the merger to happen, three quarters of Xstrata shares not already owned by Glencore must be voted in favour of the deal.
The vote comes at a gloomy time for the mining industry as the economic downturn saps the prices of commodities from coal to zinc.
Xstrata's profits for the first half of this year fell 33 per cent to US$1.94 billion (Dh7.12bn) from a year earlier. Glencore earnings dropped 24 per cent to $2.51bn in the same period.
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Started: October 2023
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Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
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Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
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Teaching your child to save
Pre-school (three - five years)
You can’t yet talk about investing or borrowing, but introduce a “classic” money bank and start putting gifts and allowances away. When the child wants a specific toy, have them save for it and help them track their progress.
Early childhood (six - eight years)
Replace the money bank with three jars labelled ‘saving’, ‘spending’ and ‘sharing’. Have the child divide their allowance into the three jars each week and explain their choices in splitting their pocket money. A guide could be 25 per cent saving, 50 per cent spending, 25 per cent for charity and gift-giving.
Middle childhood (nine - 11 years)
Open a bank savings account and help your child establish a budget and set a savings goal. Introduce the notion of ‘paying yourself first’ by putting away savings as soon as your allowance is paid.
Young teens (12 - 14 years)
Change your child’s allowance from weekly to monthly and help them pinpoint long-range goals such as a trip, so they can start longer-term saving and find new ways to increase their saving.
Teenage (15 - 18 years)
Discuss mutual expectations about university costs and identify what they can help fund and set goals. Don’t pay for everything, so they can experience the pride of contributing.
Young adulthood (19 - 22 years)
Discuss post-graduation plans and future life goals, quantify expenses such as first apartment, work wardrobe, holidays and help them continue to save towards these goals.
* JP Morgan Private Bank
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Rating: 4/5
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Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
The five pillars of Islam
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Price, base: Dh201,153
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Nine-speed automatic
Power: 204hp @ 5,800rpm
Torque: 300Nm @ 1,600rpm
Fuel economy, combined: 6.7L / 100km
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
