Brazil miner Vale raises bid for Xstrata
Brazilian miner Vale has raised its informal offer price in takeover talks with Swiss rival Xstrata, sources with direct knowledge of the negotiations said on Thursday.
3i confirm bid for Novera EnergyOne high-level source in Brazil confirmed a report in local newspaper O Estado de S.Paulo that said Vale had sweetened its bid for Xstrata to 47 pounds a share from 40 pounds previously, or to more than $89 billion (45.4 billion pounds).
But when pressed on the new bid price, the source declined to comment further.
A London-based source close to the deal also said Vale had raised its offer but stressed that a price range was still being discussed.
"There has been no offer, either formal or informal, which could possibly be construed as 47 pounds a share ... There have been some price discussions, but not anywhere near 47," a third source said.
Xstrata declined to comment on the matter.
Another source close to the negotiations said Vale Chief Executive Roger Agnelli and the company's financial director, Fabio Barbosa, were still engaged in takeover talks in London with Xstrata's management team.
Vale, the world's largest iron ore producer, has secured loans of an estimated $50 billion from a pool of about eight banks - including Santander, HSBC, BNP Paribas, Lehman Brothers, Credit Suisse, Citigroup, Calyon and Royal Bank of Scotland, a source close to the financing told Reuters LPC.
Analysts say that although Vale executives and Xstrata's management may agree in principle on an informal offer price in the coming days, several other details would have to be agreed upon before a formal offer could be put together.
A London-based investment fund that holds a stake in Glencore, one of Xstrata's controlling shareholders, told Reuters that the new offer put an agreement on a deal closer but said the mix of cash and shares Vale might offer or whether Glencore would retain rights to trade nickel of the combined company remained unresolved.
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