Why 10% above the offer:1) Because people like you expect...

Why 10% above the offer:

1) Because people like you expect another offer from BHP or IGO (or someone else). It will change as people see a bid is not coming.

2) Because hedge funds see a potential arbitrage opportunity. Buy it at a small premium, and hope Wyloo agrees to up their offer above that premium (or someone else comes in - point 1). They will all be calling Wyloo saying I can deliver you x% of the register if you pay them a small premium. Successful bidders (even if no other competitors) often have to pay around 5% more because of this reason - hedge funds holding them out.

3) Short covering

Wyloo will hold out doing anything until the Target Statement and until it becomes clear that no one else is bidding - wait 30-40 days.