Qatar Holding LLC may study softening its demand for a higher offer for its shares in Xstrata Plc (XTA) from Glencore International Plc (GLEN) as the fund’s paper loss on the proposed takeover has evaporated, said Liberum Capital Ltd.
The Qatari sovereign wealth fund had an unrealized loss of $1.4 billion on its Xstrata investment when it sought a higher bid for the mining company from Glencore on June 26, Liberum analysts Richard Knights and Ash Lazenby said today in a note. Glencore’s bid of 2.8 shares would see the fund in the black based on current prices, while an offer of 2.9 would give it a profit of $221 million, Liberum said.
Qatar surprised analysts and investors in June by calling for a higher offer, derailing the world’s biggest takeover this year. The fund is the second-biggest shareholder in Xstrata with a 12 percent stake and last week said it would oppose the bid when investors in the biggest thermal coal exporter vote on the offer tomorrow. UBS AG sees a 20 percent chance of the deal winning investor approval, it said Sept. 4.
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