Glencore, of Baar, Switzerland, has been under pressure from Xstrata shareholders to increase its offer of 2.8 of its shares for each Xstrata share, but a lackluster first-half earnings report by its target strengthens Glencore's hand.

Zug, Switzerland-based Xstrata said Tuesday that its operating profit for the first six months had fallen to $2.45 billion, down 42% from $425 billion a year earlier. Net profit also tumbled 33% to $1.94 billion from $2.9 billion.

"Our financial performance in the first half of the year reflected a cyclical downturn in commodity prices and the transition to our next generation of lower-cost mines," Xstrata said. "Following a review of our project pipeline, we have resequenced capital spending and deferred $1 billion of expenditure originally planned for 2012."

Attention will now turn to Glencore, which announces its half-year interim results on Aug. 21. Strong numbers could shift the relative valuations of the two companies in Glencore's favor, making the takeover offer more palatable to Xstrata shareholders who have threatened to vote down the deal.

Since the announcement of merger talks, the value of Xstrata shares relative to Glencore shares has only briefly, on two occasions prior to April, exceeded Glencore's 2.8 per share offer. On Tuesday, Xstrata shares traded at 905.1 pence, up 22.1 pence, or 2.5%. That equated to 2.7 times the value of Glencore's shares, which traded at 336.85, up 8 pence, or 2.4%.

Xstrata investors representing just over 15% of the company's equity, and including No. 2 shareholder Qatar Holding LLC, have said they will vote against a deal unless the terms are improved. A rebel group of about 16% of shareholders will be enough to block the deal, which needs the support of 75% of Xstrata's shareholder base, excluding Glencore, which can't vote its 34% stake.

Qatar on Tuesday said it had increased its stake in Xstrata to 11.33%. It has asked Glencore to improve its offer to 3.25 shares for each Xstrata share, a demand that has so far been ignored by Glencore CEO Ivan Glasenberg.

Xstrata said Tuesday that it believed that its merger with Glencore was on track to be completed before the end of the year. Xstrata shareholders are due to vote on the deal on Sept. 7.