Glencore's Xstrata bid: Betting on a sweeter deal

Xstrata shares are currently trading roughly in line with the ratio proposed.

The time value of money - a convention that says money held now has a higher value than money promised in the future - along with the drop in Glencore's own price to below levels prevailing before the offer was made, both point to some hopes of a sweetener.

"The number that is being touted is 3.0 and that seems a reasonable number," analyst Nik Stanojevic at Brewin Dolphin said. "The fact that it has got to 2.8 tells me the market is expecting something slightly higher."

But there is a marathon ahead. Glencore itself is not due to report full results until March 5, and a circular detailing the offer is not set to be posted the following month. A vote would come weeks after that.

Any serious negotiations to boost the price are weeks or even months away, several sources involved in the deal said.

"People need to get the circular document, they will continue to do their analysis between now and then," one of the sources said. "It will be March or April before there is a period of active discussions."

But after a jump on the day the deal was first announced, Xstrata's shares are up less than 7 percent from their undisturbed levels, indicating there is little expectation of a white knight -- and giving Glencore time.

"We are months away... God knows what happens to macro environment or even copper price by then. If copper halves between now and then Xstrata could halve," said one London-based hedge fund manager.

"There is a hell of a lot of water to go under the bridge before Glencore needs to engage in any pricing discussion."