The question is not is BHP giving away too many shares, the question is what will happen to BHP share price if BHP does not aquire RIO?
An article by Robert Gottliebson in Business Spectator last year gave a history lesson and a forward projection. It went something like this.
If BHP and RIO independently expand their iron ore capacity, then like the 70's, the market will go from undersupply to oversupply and the Iron Ore price will fall. It took demand more than 20 years to consume all the capacity brought on stream then. By BHP paying a premium to merge with RIO, the ability to maintain capital spend closer to demand will be more easily realised and therefore have far less impact on the share price.
Horse
The question is not is BHP giving away too many shares, the...
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