In an extraordinary turn of events, Glencore upped its offer just minutes before the shareholder votes were due to take place on Friday in Switzerland, where the two companies are based.
It has been widely reported that Glasenberg and Qatari Prime Minister Sheikh Hamad Bin Jasim Bin Al-Thani held negotiations in a London hotel room on Thursday night which were mediated by former UK PM Tony Blair.
Qatar's sovereign wealth fund Qatar Holding had been vocal in its opposition to the merger and demanded a ratio of 3.25 shares for every one Xstrata share held.
The proposal offers 3.05 Glencore shares for every one Xstrata share, up from 2.8 shares offered previously, and will be structured as a takeover rather than a scheme of arrangement.
Glencore is also proposing to replace Davis as CEO with its own CEO Glasenberg, who would have been deputy CEO under the previous arrangement.
Xstrata chairman Sir John Bond informed shareholders at the meeting on Friday that minutes earlier Glencore had put forward a proposal to amend the terms of the merger.
Bond stressed that it was not a firm offer, but still proposed a fresh resolution to delay the court meeting indefinitely, which was passed.
Later on Friday night Xstrata released a subsequent announcement, saying it was in no position to make a recommendation, though its independent directors made some observations.
The company said the increased ratio represented a 17.6% premium to Xstrata's share price in February, when the original deal was announced, and a 22.2% premium to the closing price on Thursday.
Xstrata's independent directors noted that the premium was "significantly lower than would be expected in a takeover".
Unsurprisingly, the directors also took issue with the plan to sideline Davis, who has been CEO since before the company's listing in 2002.
"The intention to replace Mick Davis as CEO and to amend the management incentive arrangements represents significant risk around the retention of the Xstrata senior and operational management intended to be responsible for approximately 80 per cent of the combined group's earnings," the directors said in the brief statement.
Bloomberg reported that Qatar was unhappy with the Davis provision, though the fund was yet to comment publicly.
"We would like to see greater visibility into the role proposed for Mick Davis," Bloomberg quoted Sanford C Bernstein analyst Paul Gait as saying.
"He has played a crucial, driving role in Xstrata's meteoric rise to date."
An all-out takeover would also deny Davis the roughly $A45.5 million in share-based payments he was ensured under the scheme of arrangement.
Just hours ago, Bloomberg reported that Davis and chief financial officer Trevor Reid were prepared to step aside if Glencore's offer proved to be fair to Xstrata shareholders, citing an unnamed source.
Glencore, which is yet to release a statement, is thought to be preparing an offer to make public today, which will allow Xstrata to make a formal recommendation.
Xstrata shares gained 3.6%, while Glencore shares fell 3.6% in London on Friday.