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15 Oct 2009 10:05
Mining company Xstrata said on Thursday that it won’t make an offer for rival Anglo American, backing out of a merger proposal which Anglo American had firmly resisted.
In May, Anglo American rejected a merger overture from Xstrata, its Anglo-Swiss rival. The proposed combination would create a group worth $68-billion, ranking the combined company behind BHP Billiton and Rio Tinto.
Thursday’s announcement came days ahead of an October 20 deadline set by London’s Takeover Panel for Xstrata to “put up or shut up”.
Xstrata is now barred from making another for Anglo American for at least six months.
However, Xstrata said it reserved the right to participate in a third-party bid for Anglo American.
Xstrata shares were up 0,4% at 1 035 pence on the London Stock Exchange.
“Our decision not to proceed with an offer before the deadline imposed by the UK Takeover Panel reflects our disciplined approach to growth and our focus on the value proposition for Xstrata’s shareholders in a merger,” said Mick Davis, Xstrata’s chief executive.
“We continue to assess a range of alternative growth options, in full recognition that transactions of this nature often take time and patience to mature.” - Sapa-AP
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