Qatar’s sovereign wealth fund has increased its stake in Xstrata to just over 5 per cent, potentially making it easier for commodities trader Glencore to buy the Anglo-Swiss miner.
The Gulf Arab state, a keen commodities investor, is now Xstrata’s third-largest shareholder behind Glencore and asset manager BlackRock Inc, giving it exposure to a metals powerhouse after missing out on other recent deals.
Qatar has also bought stakes in luxury goods house LVMH and oil company Total, in a recent spending spree using its natural gas riches to diversify economic risk. It also owns shares in Credit Suisse and the upmarket Harrods department store.
Several major shareholders have opposed Glencore’s $41 billion bid for Xstrata but bankers said Qatar would be a passive investor, unlikely to stand in the way. The deal must be backed by 75 per cent of shareholders excluding Glencore.
“Getting the Qataris on board will be good for Glencore. They are not activist investors and won’t be looking at gaining management influence. But they are opportunistic and won’t commit a pound unless they are seeing clear benefits,” said a Dubai-based banker.
Regulatory filings showed that the Qatar Investment Authority (QIA) built up its Xstrata holding, worth $2.65 billion at current prices, through stock market transactions from around 3 per cent when Glencore announced its bid.
No immediate comment was available from the Qatar fund.
Glencore plans to buy Xstrata in an all-share transaction that could create a combined group worth more than 50 billion pounds ($79 billion), shaking up the industry with its biggest deal to date.