Well done - one of the most logical summaries I have read for a while. I think you have hot the nail on the head though. RIO and CGNPC will do a deal and maybe Itochu as well. The latter only want offtake anyway - whereas RIO wants to reduce costs at its mine and extend the life if possible.
As for EXT - my view (and it seems the markets) is that is all over red rover. No institutional shareholders will stay in with CGNPC as a 42% holder. They will replace the Board if they don't get there way and then the minority shareholders will be bled dry, price will plummet and no one except the Chinese will win.
At the end of the day - NO ONE - Chinese or anyone else pays full value - otherwise by definition - no company would ever get taken over. There has got to be cream in it for the buyer. So they are not stealing it - they are just paying what the market will accept.
Setting up Kalahari may have seemed a great idea at the time - but now EXT s/holders are paying for it because now the Board (saving the very outside chance a white night appears from nowhere) will have no real choice than to recommend to EXT shareholders to accept when you have the Chinese state enterprise as a majority shareholder who ultimately will wield control once one or two institutional shareholders accept the bid - which of course - they will. Better returns elsewhere in the market than holding out for an extra 10%......and of course the risk the price drops by at least that post bid.
Its been a good run - but I think the lights are almost out...
DYOR
EXT Price at posting:
$8.59 Sentiment: None Disclosure: Not Held
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