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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (27680)	10/21/2008 10:04:38 PM
From: LoneClone	Read Replies (1) \| Respond to of 193374

UPDATE 1-Vale denies renewed interest in Xstrata Tue Oct 21, 2008 1:55pm EDT reuters.com (Recasts with Vale statement) RIO DE JANEIRO, Oct 21 (Reuters) - Brazilian mining giant Vale (VALE5.SA: Quote, Profile, Research, Stock Buzz)(RIO.N: Quote, Profile, Research, Stock Buzz) denied rumors that it was preparing a renewed proposal to buy a stake in Swiss rival Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz). "(Vale) ... denies and considers unsubstantiated news that it is in negotiations or preparing an offer to acquire part or all of Xstrata Plc," the Rio de Janeiro-based company said in a statement on Tuesday. A source at Vale had told Reuters earlier that Xstrata remained a possible takeover target. However, the source also said that because of Vale's sharply lower share price, it would be difficult to persuade Xstrata shareholders to accept a bid. Xstrata shares jumped in London on Tuesday on market talk that Vale was interested in building a nearly 30 percent stake in the company, traders said. Vale, the world's top iron ore producer, gave up on talks to buy Xstrata in April, saying it could resume negotiations if circumstances changed. The deal would have been one of the biggest ever, with some analysts valuing it at up to $90 billion. Since then, both companies' shares have fallen sharply as commodity prices have retreated from record highs and been hit further by the global financial crisis. "Looking at the value of Xstrata today, which is below $20 billion, I think it would be very difficult for Vale to make a proposal that the controlling shareholders in Xstrata would accept," said the source, who requested anonymity. The source, who participated in the talks with Xstrata early this year, said he did not know whether Vale was planning to make a renewed move on its rival. Vale made a $12.17 billion global share offering in July, which Brazilian media and several mining analysts speculated was in preparation for a big overseas takeover. "Vale has $12 billion in cash, but in order to keep its investment program, and with the market as tight as it is, I don't think this is the time to buy," the source said. Xstrata shares ended up 3.3 percent at 1,046 pence after earlier surging more than 9 percent on the rumors. Vale was 0.8 percent up at 26.30 reais on the Sao Paulo Stock Exchange. (Reporting by Denise Luna; Writing by Stuart Grudgings; Editing by Lisa Von Ahn)