Xstrata's board recommended shareholders back a $33 billion (€25.6 billion) takeover offer by Glencore International after gaining assurances on board composition and delinking votes on the bid and bonus payments.

Shareholders will be asked to consider two resolutions: one to approve the takeover along with £144 million of retention bonuses and a second that excludes the pay question, Xstrata said today in a statement.

The outcome of a third vote, on the incentive payments alone, will determine which of the first two resolutions is taken into account.

The recommendation brings Glencore's billionaire chief executive officer Ivan Glasenberg a step closer to combining the two Swiss commodity companies in this year's largest takeover.

The merger, five years in the making, would couple Glencore's trading operations with Xstrata's coal, copper and zinc mines, creating a group with 130,000 employees in more than 40 nations.

"It's risky to split the vote, but it's a calculated gamble," Paul Gait, an analyst at Sanford C. Bernstein and Co. in London, said in e-mailed comments.

"If the now separate measures pass, Glencore is free from the taint of railroading through a compensation package against shareholder wishes."

If the vote on retention payments is approved by 50 per cent of investors, the deal's success rests on the first resolution; if the payments are rejected, the second resolution determines the outcome. Both the first and second resolutions require 75 per cent approval.

Xstrata's independent directors unanimously recommended that shareholders approve the bid and the bonuses.

"We have always been in favour of the proposed retention arrangements to incentivize key Xstrata employees," Mr Glasenberg said in the statement.

Bloomberg