Xstrata gets Anglo offer deadline

Mining firms have been hit by falling demand for metals

Swiss-based miner Xstrata has been given just over three weeks to make a firm takeover for rival Anglo-American.

The Takeover Panel has issued a "put up or shut up" order after an application from Anglo - which felt uncertainty over a possible bid was distracting.

If Xstrata does not make an formal offer by 20 October it must walk away from any deal for at least six months.

Xstrata approached Anglo in June with a merger-of-equals proposal when both companies were valued at about £20bn.

Falling demand

Xstrata had claimed a union "of equals" between "these two world-class companies" was "highly compelling".

However, Anglo dismissed its rival's approach as "totally unacceptable" and "lacking strategic merit".

Chairman of Anglo American, Sir John Parker, welcomed the Takeover panel's move.

"We have reaffirmed our conclusion that Xstrata's proposal is not in the interests of our shareholders," he said,

Mining firms have been hit by falling demand for metals amid the downturn.

They have also had problems raising cash because of the credit crunch, which last year led Xstrata to abandon its £5bn bid for its rival Lonmin.

Earlier this year, Rio Tinto and BHP Billiton agreed a joint venture - a deal struck after Rio scrapped a planned tie-up with Chinalco, a state-controlled Chinese company.