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U.K. Takeover Panel Gives Xstrata Deadline to Bid on Anglo American

By Amarendra Bhushan for CEOWORLD Magazine Updated:October 2, 2009

The U.K. Takeover Panel ruled Friday that Anglo-Swiss mining company Xstrata PLC must formalize its offer for rival Anglo American PLC by Oct. 20 or walk away from the deal.

If it doesn’t make an offer, Xstrata won’t be able to approach Anglo-American again for six months.

Xstrata approached Anglo in June with a merger-of-equals proposal when both companies were valued at about £20bn.

Xstrata, which is saddled with more than $13bn of debt, must formalise its offer by the deadline or walk away until at least April 2010.

The Swiss company proposed the all-share merger on the grounds that the companies had a comparable market capitalisation and held similar levels of debt.

In August, Xstrata embarked on a charm offensive aimed at Anglo American analysts and shareholders in an effort to persuade them that the cost savings alone would justify a merger, and that an offer with a premium was therefore unnecessary.

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