Rio can always offer shares in Rio Tinto. Here is one scenario that I particularly like:
Offer ranging from 1 RIO share for every 4 EXT (valuing EXT at $14.19 at today's price) - or 1 RIO for every 3 EXT (valuing EXT at $18.91 at today's price). I base this on other threads valuing EXT at between $14 to $20.
Then later this year Rio get taken over by BHP, who offers 2.5 BHP for each Rio share.
EXT shareholders will pay no capital gains tax on the takeover if shares are offered, unless and until they sell the RIO/BHP shares. Whereas a cash offer for EXT will attract capital gains tax.
One reason I have so many EXT is because the reward from such a scenario is particularly high.
EXT Price at posting:
$3.93 Sentiment: Buy Disclosure: Held
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