Our “anti-climax of the month” award goes to Xstrata, the Anglo-listed Swiss miner at the heart of one of the world’s biggest potential takeovers worth an estimated $90bn: Xstrata on Monday morning posted a 13 per cent rise in annual net profit on Monday on strong output, but gave little detail about ongoing talks about a possible takeover by Brazil’s Vale.
In a comment that was even more fleeting than analysts expected, Xstrata only said in its statement that: “Discussions with Vale are ongoing and may or may not lead to an offer for Xstrata.”
However, it added, the company was still on the lookout for ways to boost value for shareholders and continues to “assess a range of opportunities to continue Xstrata’s success to date in delivering superior value to shareholders”.
Xstrata, the world’s fifth-largest mining group by market cap, said net profit for 2007 rose to $5.54bn from $4.89bn in 2006 – just slightly short of analysts’ expectations of a 15 per cent profit increase. Oh, and Xstrata confirmed that talks over its potential merger with Vale were continuing.
As the FT reported earlier, however, talks are bogged down over demands by Glencore, Xstrata’s biggest shareholder, for a 10-year exclusive marketing contract for the combined companies’ output of commodities as its price for agreeing to the transaction. Reuters adds that Vale on Friday said it had “reached its limits” in takeover talks and added any future deal depended on Glencore and its stance over marketing rights.
Xstrata with headquarters in Switzerland and listed in London, produced record amounts of coking and thermal coal, ferrochrome, nickel, zinc and platinum in 2007. Its revenue rose 12 per cent to $28.54bn while earnings per share before discontinued operations and exceptional items also rose 12 per cent to $5.60.