rio or ozl

This is a copy of a post I have placed on RIO & OZL threads & may be of interest to existing BHP shareholders.
This post relates to both RIO & OZL.
My personal view is that BHP executives know it is easier to buy known resources in production or near production than spend their dollars trying to find major discoveries. We also need to remember BHP is only interested in huge resource projects that meet their criteria.
BHP would be aware of the recent announcements concerning both RIO & OZL & would be running their numbers on their resources. BHP knows it has a political advantage over overseas players because the Federal Government is more likely approve a deal to them than an overseas company. BHP know they purchased a bargain in WMC & would be hoping for a similiar deal. BHP are not quickly going to rush out & make counter bids for either RIO or OZL, so current shareholders need to be a little patient.
BHP are well aware of where we are on the commodity cycle & would know we may have seen the bottom last November given the Baltic Dry Index is now starting to recover. They would also understand China's demand for resources is going to last years & the Chinese are planning to control as many resources as possible buy purchasing in this current down turn.
Also BHP is highly unlikely to make a play for both companies, so we need to look at the positives & negatives of each potential deal.
RIO: We know BHP like RIO by its previous actions. In hindsight BHP know they offered too much & would have acquired too much debt, but given the current price of RIO relative to BHP share price it can be done a lot cheaper.
OZL: Whilst some assets of OZL won't appeal to BHP, they would like PH & know they are dealing with a forced seller. BHP also knows the lesser projects could be onsold down the track. Given BHP reluctants to take on high levels of debt their current share price could make OZL an easier deal than RIO via a simple share offer & being prepared to takeover OZL existing debt.
Unlike what some posters on OZL thread have imply that BHP will buy OZL assets from the receivers, I think this is a high risk strategy for BHP to adopt if they really want the assets. It is safer to bid for the whole group then carve up assets later amongst other potential buyers.
BHP will not race into either proposal quickly but they also know when they move it probably will be a winning move just like with WMC.
BHP knows well that Australians want Australian Resources owned by Australian Companies & this carries plenty of political muscle in passing ACCC hurdles.
Shareholders in both RIO & OZL may need to be a little patient, as I would be surprised if BHP passed on both deals.
Please note this post is only my personal speculation on what could occur & no investment decisions should be based on this post.
Regards
Buffett