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(Bloomberg) -- When Glencore Plc Chief Executive Officer Ivan Glasenberg pitched his vision of creating the world’s biggest miner to Rio Tinto Group last year, it’s unlikely he foresaw a commodity market rout of this magnitude coming.

Glencore’s stock slumped to a record today as copper prices dropped to the lowest since 2009. As a result, the 58-year-old billionaire’s firepower for what would likely be an all-share offer is diminishing.

The dive has widened the company’s under-performance since the spurned takeover approach was revealed in October -- Glencore is down 28 percent, Rio just 6.4 percent -- meaning Glasenberg, who’s personally the business’s second-largest shareholder, would have to offer more equity to win his prize.

“Glencore acquiring Rio Tinto in this environment would be extraordinarily difficult,” Chris LaFemina, an analyst at Jefferies LLC, said today by phone. “It was going to be extraordinarily difficult anyway, but I don’t know that it’s even possible in this environment. Glencore is just not in a position of strength right now.”

Copper, used in pipes and wires, is the biggest earnings driver for Glencore, contributing about 45 percent of its earnings before interest, tax, depreciation and amortization, according to Liberum Capital Ltd.

Rio’s always been a bigger company than Glencore, but the gap in market value has widened considerably. In October, Glencore was worth about $68 billion compared with Rio’s $85 billion. The figures today are $49 billion and $80 billion.

‘Think Twice’

“Ivan will have to absolutely think twice before bidding for Rio,” Paul Gait, a mining analyst at Sanford C. Bernstein Ltd. in London, said today by phone. “It makes it a harder deal to do. He will have to issue more Glencore shares to pick up the Rio paper, he’ll be more diluted and his shareholders also won’t like it so much.”

Glencore and Rio Tinto declined to comment.

Copper’s slide follows steeper drops in coal, oil and iron ore and makes it the “last domino” to fall in a broader commodity market decline, according to Liberum analyst Richard Knights. The Bloomberg Commodity Index fell to a 12-year low today amid growing concern slowing global growth will curb demand, trimming earnings prospect for producers.

Still, copper’s demise is likely to be short-lived given demand is expected to exceed supply next year and only an extended slump would curb the ambitions of CEO Glasenberg, Clive Burstow, an investment manager at Baring Asset Management, which oversees about $44 billion including shares of Glencore and Rio, said today by phone.

Impacting Valuation

“I don’t think it will have a particular impact on Glencore should it take a tilt at Rio Tinto later on this year,” he said. “If this goes on into the second quarter then I think that could start to have an impact on the valuation multiples.”

Glencore,based in Switzerland, fell 9.3 percent to close at 244 pence. It’s slumped 18 percent this year. Rio fell 4 percent to 2,804.5 pence.

Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director of Glencore.

After Rio Tinto revealed it had been approached by Glencore in October the Swiss miner said it wasn’t considering an offer, effectively barring it from bidding for six months under U.K. takeover rules. With that ban lifted in April some have pondered whether Glencore would revisit the plan.

A combination of the two would be the largest mining deal ever completed, topping London-based Rio’s purchase of Alcan Inc. for about $38 billion in 2008. Glencore bought Xstrata Ltd. for $29 billion in shares in 2013.

Iron Ore

By merging with Rio, Glencore would add the world’s second- largest iron ore export business, immediately catapulting itself from a minnow in the trade to owner of one of the most profitable mining operations on the planet in the Pilbara mine, port and rail hub in Western Australia. London-based Rio sold $13 billion of iron ore in the first half of last year, accounting for about 85 percent of its net income.

“Never underestimate the ambition of Ivan Glasenberg, I think he would love to get his hands on it,” Barings’ Burstow said. “But also don’t underestimate the determination of Rio Tinto to stay an independent company. Whatever happens it is going to be a fascinating tussle between those two companies.”

--With assistance from Firat Kayakiran in London.

To contact the reporter on this story: Jesse Riseborough in London at jriseborough@bloomberg.net To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Tony Barrett

Bloomberg