Glencore is seeking advice from Citigroup and Morgan Stanley on options for its 35% stake in Xstrata, the Anglo-Swiss mining group. The investment banks, which have both worked with Glencore on past deals, are exploring ways in which the Swiss commodity trader could maximise value from its holding. At Wednesday night’s price, the stake was worth £13bn. The move suggests that Glencore has yet to decide whether it should back a possible bid for Xstrata from Vale, the Brazilian miner formerly known as CVRD. Vale has secured $50bn of available funding from a consortium of banks to finance a possible cash and stock bid for Xstrata. However, it also needs to persuade Glencore to accept preference shares, which have fewer rights than its ordinary shares. For its part, Glencore is thought to want a significant premium and a large cash element before it agrees to a deal with Vale. Read more insights from FT Alphaville’s Markets Live team.

This entry was posted by Gwen Robinson on Thursday, February 7th, 2008 at 5:32 and is filed under Capital markets, M&A. Tagged with glencore, vale, xstrata. Edit this entry.