take over bid, page-12

Does Rio Tinto want to buy a small potash explorer but expect a bidding war?


Yes Denpal,

Rio Tinto is definitely the second suitor.
Here is the thread we discussed about Rio Tinto's ambition for potash. Click here

Albanese says: "So I do like potash. We did sell the Argentinean asset during the financial crisis. But I've told our geologists, if we find the right opportunity let's get into it."

The original interview was done by Alan Kohler with Rio Tinto Chief Tom Albanese for Inside Business program of ABC TV on 13th of Feb. 2011, just recently. Click here to read the interview from ABC's site


One of the the things which Albanese says in this interview is very strongly matches what Emerging Markets Investor said on that newsletter; they are talking about BHP takeover offer and then a bidding war.

Emerging Markets Investor said on that newsletter: "We have heard of great interest from BHP, who is only waiting that the results are confirmed by JORC, then they a take over offer is imminent. A bidding- battle could also commence due to this scenario within the next weeks"

Albenese says on the interview below; "...I think we'll focus on again the smaller ones that could be bolted-on or complement our existing businesses. If we have them, great If we don't have them, fine. We'll just keep working on our existing Rio Tinto businesses.

"If we have them, great If we don't have them, fine" This means that they are expecting a bidding war.


Potash talk is at the end of interview. Albanese talks about iron ore and copper business from the start.

ALAN KOHLER: Well, in general, where would you like to see Rio Tinto's portfolio expand? You've obviously got your bid for Riversdale, which is the metallurgical coal business in Mozambique, but what else would you like to do?

(My note: Albanese prefers to emphasise their investments for Pilbara iron business, copper business, coal business, and he adds;)

TOM ALBANESE:"...I think I'd like to look at uranium, I'd like to look at diamonds. But I'd say on balance, I think we have a pretty good portfolio in virtually all of our businesses where we can be expanding those businesses,....."

(My note:But Alan Kohler loses his patience and cuts Albanese's words; Watch the interview and see Alan Kohler's face here when he starts to talk. His body language was saying "Ok tell me the truth". And Alan Kohler spits out what he wants to talk about.)

ALAN KOHLER: So are there any products that you're not in that you'd like to get into? I mean I'm thinking about potash, which BHP bid for that big Canadian potash business but underpaid, failed. What about you?

TOM ALBANESE: I'd certainly- We've been in potash ourselves. I was the one that got us into the Argentinean potash in 2001-2002.
...
So I do like potash. We did sell the Argentinean asset during the financial crisis. But I've told our geologists, if we find the right opportunity let's get into it.

But frankly, on potash and many of the new things, I'd rather look at them from more of an exploration perspective. Find some new resource and look at developing on a green field basis.

I'd say on the sort of the M and A space, in terms of - as I scan the landscape - I'd be more narrowly focused on the smaller type things that really would be more of a bolt-on to the existing businesses of Rio Tinto.

I think we can certainly satisfy our growth objectives by focusing first and foremost on organic opportunities within the existing suite of Rio Tinto businesses.

ALAN KOHLER: So no big takeovers?

TOM ALBANESE: No, I think we'll focus on again the smaller ones that could be bolted-on or complement our existing businesses. If we have them, great If we don't have them, fine. We'll just keep working on our existing Rio Tinto businesses.


My note:
One thing is taking my attention here; Albanese is pretending as if Rio is not very keen on potash business, but we all know that Rio reps was chasing Uralkali boss Suleymanov in Russia, to convince him for selling 10-15% (of $25b value) of his businees a few months back.

Why Alan Kohler was pushing Tom Albanese to talk about potash business this much?

Does he know something that Rio Tinto is going to make a move on potash business?

Albanese is clearly telling that they are looking for a small potash exploration company.

It looks like they have foudn something but not sure if they can get it. "If we have them, great. If we don't have them, fine".

This could mean that they don't want to go into a bidding war for it! He pretends that he is not very keen on that thing.

Now this point is important;
As you can see on the Emerging Markets Investor newsletter, they are talking about BHP takleover offer and then a bidding war. This is very strongly matches what Albanese says here in this interview.

IMO, Alan Kohler has the best radar system of this market. He knows something.

I hope that small explorer is not ELM.
(I wish it is STB or Allana, or someone else !)

ELM (and its sp) have a long way to go.
Let us free Rio!