looks good, page-71

JArecki

Re BHP's letter to RIO SHs & the 45% premium

Worth noting that RIO's SP had experienced a 3 months surge from $81.16 on August 17 just prior to the takeover offer announced Nov8 [????].

Change to actual SPs at times of announcements re 3.1 offer on Nov8 2007 & increase to a ratio of 3.4 on Feb6:
BHP: Nov7 $44.86 Nov8 $43.24 Nov20 $40.30 [down $4.56]
RIO: Nov7 $112.22 Nov8 $113.40 Nov12 $139.72 [up $27.50]
BHP: Feb5 $39.65 Feb6 $36.66 [down $2.99]
RIO: Feb5 $127.35 Feb6 $127.14 [down 21c]

You can make of data what you want but IMO these figures show that RIO's price leapt at the first announcement but didn't change after the second one. BHP's SP was smashed by about 10% on both occasions.

If RIO's August 17 CP of $81.16 is used & referenced to the $139.72 peak you can even argue that there was a 72% increase [of course there is no insider trading on our boarse that would have caused this]! I won't buy RIO for these reasons alone - IMO its SP will slump at least 30% if the takeover is called off. IMO BHP's SP will rocekt 20% on the news!

4YIO - NFA