Interesting situation developing in relation to the possibility of RIO not achieving their 50.1%. At present they remain light years away from the target(34.94%) with only two business days before the previously extended offer deadline. So RIO had little choice but to extend (or withdraw). It also appears from the wording of their announcement today that they recognise the remoteness of the possibility of any acceptance from Tata or CSN...wording as follows:
"RTJ understands the additional time would allow some market participants to finalise the unwinding of equity swaps and to settle trades that have occurred on the Australian Securities Exchange (ASX) before they can accept into the Offer or the IAF."
If RIO thought it was likely that either of the other major shareholders would accept before the deadline why bother to put in some obscure reasoning for an extension.
I'm not sure how many extensions can be made, but I'm thinking that eventually it may become obvious that there are holdouts.
I cannot recall the company, but I do remember a company subject to a takeover that was about to be delisted because of the insufficient shareholder numbers issue going up in price steeply as the delisting approached. Those who took the risk could sell on market to speculators who wanted to stay in the company post delisting or remain as passive minorities.
Regards DF
RIV Price at posting:
$15.75 Sentiment: None Disclosure: Held
