frs merger - we are not quite there yet, page-5

Do WNI still want 90%? I thought their offer had closed.

AS WNI is a "holding" company, I think they'll be happy with an interest of less than a full takeover for both companies, as other holding companies do. Then they get to have representatives of WNI on both BRM and Ferrous, whilst keeping the same managememnt and Directors of both companies, I presume, to run the day to day mining. WNI can have some influence over direction of BRM and FRS, but so can holding companies of any company they hold.

Another mining control looks to me like the BRM/FRS/WNI nexus: that of Rio Tinto and Ivanhoe Australia. Rio just increased its interest in IVA from 42% to 46.5%.

http://www.smh.com.au/business/rio-edges-to-ivanhoe-duel-20110622-1gfcc.html

If you check IVA's share price, it's a mess. RIO will now have more representation on IVA's board (not mentioned in the above article, but it's the case and RIO is exercising that right). As for a premium for BRM/FRS shares, check this out re RIO and IVA:

"But hostilities between Rio and Ivanhoe over the potential for Rio to creep up from its current stake to outright control without paying a premium to minority shareholders continue to bubble away."

And here was us thinking a company could have no more than 19.9% before a takeover had to be made. RIO has 46.5% of IVA. Hmmm.

One of my points with this is that it's not just WNI being "sophisticated" and wanting control of other companies- it's happening all over. I guess that's just what happens in business? If people think that WNI has been naive, unsophisticated, amateur, etc, perhaps they are just doing what RIO and other companies do. There are a lot of precedents for these things. It's up to the companies that are being "held" to work out strategic ways to respond. The "poison pill" of rights issues/capital raisings is one way to dilute the holder. BRM would need to work out why they need funding and then just do a massive capital raising.

Just thoughts. :) What is done is done re WNI, but how does BRM work out the future, or are they happy to just work with WNI as their major shareholder, and put the past behind it?