Agree Dr Pwu.
From the numbers seen, I do not think they would get much change from the 140 mill cash available for acquisitions, even if they got it at a good price. I think the current owners paid about 266 or 366 mill (?) for the business not so long back. I think if they buy this underperforming (its been generating losses) operation, there might be no or little cash left for other opportunities that will arise.
I have always believed in the merits of diversification, if there is good management both at overall and divisional levels (the growth of Wesfarmers and BHP are great examples).
In relation to One Steel. From memory, it was demerged from BHP as the long steel making operation: Bluescope was demerged as the sheet steel maker. The demerger of Onesteel also included iron ore mines (in South Australia near Whyalla). One Steel uses this high quality iron ore to make its steel products and generates extra revenues by exporting the surplus ore.
Given the One Steel experience, maybe CSR could buy some of its high quality raw material suppliers (eg sand mines, cement makers etc).
The problem is that the management of CSR has been trying to convince us of the benefits of becoming a focused manufacturer to justify the Wilmar deal. So to diversify would be somewhat in contravention of their stated aims. Which direction do they want to head?
The best course presently might be to pay cash for small bolt-on acquisitions that complement existing operations and are instantly earnings-accretive. I am not sure the NZ glass business they are interested in fits this criteria.
I am not convinced from the Viridian (formerly Pilkington) experience that CSR can get instant positive results from this type of business.
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