Xstrata's multi-billion dollar takeover bid for Anglo American could be over after leading institutional shareholders have reportedly turned down the nil-premium merger.
The UK's Times Online has reported that all of Anglo's leading institutional investors were understood to have rejected the ₤40 billion ($A82 billion) takeover offer in a bid for Xstrata to come back with a premium to the offer.
The shareholders are reportedly chasing a premium of around 30 to 50 per cent.
Last month, Anglo American rejected the Swiss company's merger proposal, snubbing a move that could have forged both entities into one of the world's biggest miners.
Xstrata had previously said it was seeking a possible "merger of equals".
The activities of the two companies overlap in many areas.
Both own coal assets in Australia and South Africa and there had been potential for savings across their copper mining operations.
But Anglo American said in its statement that "a combination with Xstrata would profoundly impact the nature of the Group's portfolio."
A merger risked "significantly diluting Anglo American's unique exposure to the structurally attractive platinum, iron ore and diamond markets while increasing exposure to nickel and zinc," the company said.
Anglo American is cutting 19,000 jobs this year after posting a 29 per cent fall in 2008 net earnings because of sliding demand for raw materials amid the world's worst economic downturn since the 1930s.
The group has also come in for much criticism from shareholders after chief executive Cynthia Carroll decided against paying a dividend for 2008.
Carroll, who has headed the Anglo-South African firm since March 2007, has also reduced Anglo American's 2009 investment program by half to $US4.5 billion ($A5.72 billion) because of global economic uncertainty.
