Xstrata has two weeks to decide on Glencore bid

If approved, the deal would create an $80bn mining-to-commodities trading giant.

Xstrata said it had been asked by the Takeover Panel to respond to the new offer by 7am on 24 September. That will be six-and-a-half months after the two companies first announced their agreed merger.

In the meantime, Xstrata shareholder Knight Vinke has called on the directors to see if they can find a higher, third-party bidder.

The formal revised offer detailed yesterday - which emerged on Friday, minutes before Xstrata's shareholder meeting was set to vote down the original deal - contained relatively little new.

The offer has been raised from 2.8 Glencore shares to 3.05 shares for each Xstrata share. Glencore said this will not be increased and claims it represents a 27 per cent premium.

Xstrata's chief executive Mick Davis will take the same role in the merged company but step down "within six months", handing over to Ivan Glasenberg, the chief executive of Glencore and the single-largest shareholder in the new group.

As previously, Sir John Bond will become chairman of the new company and the board will be made up of equal numbers of non-executive directors from each company.

Glencore has asked Xstrata to look again at the £170m retention package offered to 73 of its top managers to ensure they stay on. Glencore wants this to be "acceptable to independent Xstrata shareholders".

That mainly means Qatar's sovereign wealth fund which holds 12 per cent of Xstrata and would have blocked the old deal. Following the intervention of the former prime minister Tony Blair, it is reserving judgement on the new offer.

Glencore is still pursing the deal as a scheme of arrangement which requires the backing of 75 per cent of Xstrata's independent shareholders, but reserves the right to turn it into an outright takeover bid if Xstrata agrees.