Hey GuysAnother very exciting bit of news in the papers today...

Hey Guys

Another very exciting bit of news in the papers today about one of IndoChine's cornerstone investors, Blackrock!

Not only do they own 15% or $14Billion worth of BHP and are BHP's largest shareholder, they are also the "world's largest money manager" AND Blackrock is the key to the takeover offer between Xstrata and Glencore.

WHY? Blackrock is Xstrata's largest shareholder, owning 5.8% of Xstrata .

Again, IMHO, Blackrock's substantial investment in IDC, currently a $50-70million market cap would not have been made if there wasn't the expectation of a significant increase in IndoChine's Market Capitalisation as they derisk the Mt Kare Gold Mine Project. :)

Cheers Nectar

BlackRock the key to Xstrata Merger

By DANA CIMILLUCA WSJonline

As mining giants Xstrata PLC and Glencore International AG aim to pull off an industry-redefining merger, the deal's fate depends largely on one investor: BlackRock Inc.

With a 5.8% stake, BlackRock, the world's largest money manager, was Xstrata's largest shareholder after Glencore as of Feb. 14, according to FactSet. Glencore itself owns 34% of Xstrata.

Under the deal's current structure, three-quarters of Xstrata shareholders would need to bless the union, which would create a firm with a market capitalization of $90 billion. Given that Xstrata governance rules, intended to protect minority shareholders, bar Glencore from voting its stake, it would be blocked if just over 16% of Xstrata shares are voted against the deal. The fact that opposition from such a small group could nix the deal gives BlackRock tremendous influence.

That sway is only amplified by the fact that several investors have already indicated they will vote against the deal on its current terms.

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Bloomberg News
Xstrata's Mount Isa mine in Queensland, Australia, is home to copper and lead mining and smelting work.

BlackRock officials have kept mum on how they intend to vote on the deal since it was announced earlier this month, and a spokeswoman declined to comment. But Evy Hambro, co-manager of the $12.4 billion World Mining Fund, where a big chunk of the firm's Xstrata stake resides, is known for having strong opinions and not being shy in expressing them. Mr. Hambro is the son of mining magnate Peter Hambro and scion of a famous British banking family.

A BlackRock spokeswoman declined to make Evy Hambro available to comment.

Mr. Hambro has made his presence felt in the past. In an interview with Bloomberg Television in April 2008, Mr. Hambro blasted BHP Billiton's hostile takeover bid for Rio Tinto, saying BHP—in which BlackRock holds a roughly 10% stake—was issuing too much stock in the deal and should walk away. Later, as the financial crisis raged, BHP did just that.

Now, the industry is watching carefully for signs—big or small—of how BlackRock will play its hand in this case. In a possible sign of how important Mr. Hambro is to the outcome, one of the key bankers on the deal, J.P. Morgan Chase & Co.'s Ian Hannam, dined with him in South Africa, where the two were attending a conference the night before the deal was unveiled, according to a person familiar with the matter. Another person added, though, that at least one other investor was present and the two men dine together each year at the conference.

While most of BlackRock's Xstrata stake is held outside the World Mining Fund, the firm tends to vote all its shares as a block, though on occasion portfolio managers reach differing views. The fund is the biggest investor in many of the world's largest mining companies, including BHP, the biggest.

As a result, the fund has outsize influence in the industry. That is especially true now, at a time when cost and competitive pressures are driving industry players into bigger and bolder combinations—deals that require shareholder support.

Since the Mining Fund was launched in 1997, the annualized return of the fund's A Class shares has been 13.1%. That compares with a 9.1% gain for a benchmark index of mining stocks compiled by HSBC, according to BlackRock.

In the case of the proposed Glencore-Xstrata tie-up, some Xstrata shareholders are complaining that Glencore isn't issuing enough stock to them. The proposed deal, which the companies bill as a "merger of equals," calls for Xstrata shareholders to get 2.8 Glencore shares for every Xstrata share they own. That equates to an 8% premium to where Xstrata shares traded immediately before the deal surfaced.

In a sign that the market expects Glencore may be forced to sweeten the offer, Xstrata and Glencore shares have hovered around that 2.8:1 ratio in recent sessions. Stocks subject to merger offers generally trade at a discount to the price being offered, to reflect the time until the transaction closes and the risk that it will fall apart.

On Thursday in London, Xstrata closed at 1,177 pence, compared with 426.6 pence for Glencore, leaving the ratio at 2.76:1.

A sweetened deal, however, could prove awkward for Xstrata Chief Executive Mick Davis, who has said he believes he got the best deal possible out of his counterpart at Glencore, Ivan Glasenberg. Mr. Davis is to be CEO of the combined company, with Mr. Glasenberg as his deputy.

So far, at least three Xstrata shareholders—Standard Life Investments Ltd., Schroder Investment Management Ltd. and Royal London Asset Management Ltd.—have publicly raised doubts about the deal on its current terms. Together, they own a 3.3% stake in Xstrata, according to FactSet.

People close to the deal argue that shareholders with stakes in both companies will be more inclined to support it. But though BlackRock owns stock in both companies, it has a much bigger stake in Xstrata. Still, if BlackRock takes the view that the deal is good for the industry and will serve as a catalyst for more consolidation, that could lead it to support the merger on its current terms.

Write to Dana Cimilluca at [email protected]