money mag suggests gbg as takeover target, page-6

Thanks to Blades on the AGO forum for this one:

"Fortescue Metals tipped as takeover target post BHP Rio deal

By Surabhi Choudhary in Singapore and Lucinda Guthrie in Hong Kong

Published: November 18 2007 17:30 | Last updated: November 18 2007 17:30

dealReporter is an independent news and research service providing the financial services market with extensive coverage of all aspects of M&A, private equity, special situations and rumors across the European, pan-American and Asia-Pacific markets.


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Fortescue Metals is likely to emerge as the next potential takeover target in any iron ore sector consolidation following a BHP and Rio Tinto tie up, Australian sector bankers and analysts told dealReporter. Mining industry sources also indicated that iron ore juniors could also get snapped up in any wave of sector consolidation.

According to James Wilson, a resource analyst at DJ Carmichael, with the BHP Rio merger, the number of players in the iron ore sector will reduce significantly. Wilson said that in such a scenario Fortescue Metals is likely to emerge as the next takeover candidate. He also said that Fortescue has about 2.5bn tonnes of resources and once a company gains control over Fortescue, a potential bidder could gain control over most of the infrastructure facilities at Pilbara. Wilson said that any merger provides synergies of cost and when asked as to whom the other possible takeover candidates could be, he responded saying that likely M&A candidates could also include companies such as Atlas Iron, BC Iron and Red Hill Iron.

A second industry analyst agreed that the BHP Rio merger could spark a whole raft of potential M&A. He also said it would be worth evaluating if this tie up will have an impact on access to infrastructure and access to railway lines. When asked if this would make Fortescue an attractive takeover target, the analyst replied saying that people will wait for Fortescue to come into production. The company is expected to commence production in 2008. The analyst also said that there would be definitely more potential for consolidation at the smaller end of the spectrum that have tenements adjacent to each other. However he did not name any likely candidates. "