Xstrata has told its top shareholders it is unlikely to continue its bid for a merger with Anglo American, saying a new incoming chairman for Anglo meant support for a takeover would be lacking.

Speaking to a top-ten shareholder meeting, Xstrata said it will walk away from negotiations before its 20 October deadline for a formal takeover bid set by British regulators.

Speaking with news service Reuters an unnamed investor said Xstrata now plans to wait six months to see if things deteriorate from an Anglo perspective or if Anglo chairman John Parker changes his view.

Parker previously viewed Anglo’s ‘nil premium’ merger proposal as ‘totally unacceptable’ and Anglo shareholders were standing by his side stopping the creation of what could be the world’s largest producer of zinc, platinum and coal for power stations.

Anglo and Xstrata combined could also become the largest producer of ferrochrome and the second largest in coal for steelmaking and copper.