the baby is awake, page-13

Harlee and Don, bless you both, we have travelled this long road together for many years. I guess we are overdue for another top 20 but I'd love to have another report which shows the make-up of the top 100.

Management gave us that in one of their annual reports, and for a guy who loves percentages and stats it made for interesting reading, hope we see it again.

AJ, I dunno how they came up with the figure. I guess you can call Rance Dorrington or one of the other guys and they can explain.

Bubwell, maybe I'm a wishful thinker but I tend to see leaky boats whenever there is any hint of take-over. They are usually preceded with abnormal buying. In the case of EXT and the low availability of free-float I would think that abnormal buying would lead to some severe rises just before the information became public.

So I would say "fear not", the figure should far exceed the $2. I do not pretend to know as much as other people about the machinations of the markets but I watched what happened with BHP and Olympic Dam. BHP paid way, way more than they would have had they made their move earlier, prior to Xtrata making a move, why didn't they move sooner?

Well, I think it is like this. As long as no one else is making a move then these massive companies are not in a hurry. They think in terms of decades and I think RIO thinks the same way.

RIO is a company like all other massive companies with internal procedures designed to protect the company from individuals within their firm making big mistakes (it's a shame Barings bank didn't have better processes).

The dispassionate procedures are all targetted at risk minimisation. As the risk decreases, the price to RIO rises but so be it, they have the money and they think in terms of decades, more importantly, the process needs to be followed to protect the company.

So, I think there are many boxes to be ticked before RIO will move on EXT, a successful BFS would be an example of one of these boxes.

Even if (say) KAH made a move to take over EXT, RIO would be alert but not alarmed, they would simply take over KAH at the appropriate time.

What would trigger an early move by RIO would be if someone big, someone like Areva, Xtrata etc. made a move on EXT. Then the risk management procedures would be short circuited at board level to prevent the irretrievable loss of this opportunity.

So I guess I am saying you will get way above $2 by virtue of the fact that either more will proven up by the time it happens or it will be pushed up by a bidding war. Either way you will walk away with a figure which made the wait worthwhile.