LONDON Xstrata's XTA.L shareholders did not pass a first resolution that would have approved a $31 billion takeover by trader Glencore, subject to a controversial retention package, as not enough investors heeded a recommendation from the miner's board.
Only 67.8 percent of shareholders voted in favour of the first of two resolutions on the tie-up - short of the necessary 75 percent threshold.
Shareholders, at a meeting in the Swiss town of Zug, are now set to vote on a second resolution, deciding whether or not to approve the deal without the "golden handcuffs" plan to retain key Xstrata managers. This is expected to pass.
The retention plan itself will be voted on separately.
Earlier on Tuesday, Glencore shareholders overwhelmingly backed the deal.