Mien Analysis on der Takeover Speculation gripping dis AGO stock-
RIO, BHP and FMG no interest in takeover of AGO - dey increasing production and spend $$Bs on new mines & production rather than new buy, have lots of resources extra. Chinese just buy Aquilla just and many oppose die including MIN who get burnt wit loss of $12M for making better offer. Chinese also have mass plant and mills onshore and lots supply pig iron at home, dey spend now $5B on Aquilla infrastructure like Minmetals and take 2-4 years wit cost blowouts and deal with OZ workers who not like chinese workers under commies. Dis prove very difficult.
Who is left- only MIN mineral resources or US hedge funds/KKR promoted by Bloomberg. US steel companies like US Steel in doldrums and der gold companies like Newmont pulling back from OZ. US funds have cheap junk bonds and cheap funds from US Fed, can buy anything cheap globally but sitting on $Ts in cash instead, only lat few months is there some decent M & A mainly internally in US. With rates going up next year and AGO this cheap I postulate time for dem to move on AGO.
Or MIN- der failed Aquilla bid burns dem and once bitten twice shy. Dey should have gone for AGO first not Aquilla, waste of money, easier to buy AGO that spend $6B on Aquilla over next 4 years with no mines and infrastructure. MIN already a producer looking to expand, synergies Wunderbar, can build rail and infrastructure at $1B instead of waste $6B with Aquilla, dey show their hand they are on acquisition trail. MIN is obvious contender, it makes logic and mathematics good wit savings and cheaper cost with already producing miner like AGO, automatic bounce for both and dey can compete with big 4 by economies of scale and synergies in savings, AGO costs reduce.
Bloomberg no fools, dey pushing someone into AGO, but MIN may have counterbid like Aquilla, best for MIN to go early instead of counterbid like wit Aquilla. If dis happen bids likely at $1 as large change of shares happening in AGO since Aquilla bid fell. SP go to $1.20, if AGO SP increase to 90c it force bidder in quicker as their bid den must be over $1.20.
Otherwise, AGO SP still move back to $1-$1.20 in next few months due to rebound in IOP and higher production/lower costs anyway, now is perfect low time to be "opportunistic" on AGO bid
AGO Price at posting:
66.0¢ Sentiment: Hold Disclosure: Held
