rio's new offer, page-2

In my opinion the market is now expecting RIO to declare the bid unconditional in a couple of weeks as the last effort to attract acceptances and get their reasonable minority holding. It is obviously very unlikely the major shareholders of CSN and Tata will accept and RIO know this. Therefore the comment about getting to 50% by March 23 is a furphy. There is practically no hope of that happening.

However, as the game plays out they are trying as hard as they can to shake the tree and get smaller minorities to accept while keeping their options open and threatening to withdraw. I believe there are a number of significant shareholders who will stay the course and wait until this reaches production knowing there are bumper profits in store.

Finally, the fact that RIO has put a lid on its offer of $16.50 makes the possibility of a counter offer a little more likely as a new bidder now can trump RIO with a cash bid of say $17.50 knowing RIO cannot raise theirs. Sit tight is what I intend to do.

regards
DF