bhp & rio - only a handfull will make it., page-15

bhp's offer will not be take it or leave.

they will want shareholders to think that it is to scare us into submission.
but in reality they will not let this slip past them.

we know they want umc.
we know why, regardless of what they say.
160mt is chicken feed for these guys.
the resource estimate has been known for months.
they know its much bigger and extends into their land.
so why bid now?
whats changed?
we have chinese interest!!

dont be fooled - bhp would pay multiples of $1.40 for umc.
not for the ore, but to keep china out.

its unfortunate that we have JGPM and his mates ready to sell at the first offer.
but thats their decision.
and good luck to them.

bhp will not allow the chinese to move in next door for the sake of $220m or even $400m.

if bhp double the bid to $2.80 they will get UMC.

living in dreamland for a second, at triple the bid of $4.20 they will still pick up a $10b+ asset for less than $700m AND keep the chinese out.

our weakness now is not management.
it will be these loose hands who just want out, not realising that if umc and its shareholders dig their heels in, bhp will pay thru the nose to keep the chinese out.

isnt it a coincidence that when chinalco was close to investing in rio that bhp proposed an pilbara IO merger with rio.
chinalco would have had a blocking stake in rio should bhp want to come back later on and try again for rio.

bhp is scared of chinese investment in their backyard.
i like that.
i only hope we can use it to our advantage.

all just in my opinion as always.