takeover near?, page-6

Thanks KKR - great to see your posts again.

Have difficulty in working out the implications of your item - but it does seem to indicate a failure by Minmetals to take over Anvil would be positive for holders - in that the takeover price offered does not allow for the significant developments that the company is into right now. But it seems that the message is possibly too late to stop this takeover or that possibly Gecamines regards its interest in Anvil as being of no consequence in the matter.

The following item clearly states the reason Anvil has been sort after by China - something well articulated in previous posts. (also see ----

http://seekingalpha.com/article/350401-anvil-mining-the-deadline-date-is-fast-approaching

------- for comment on takeover offer)




""INSTANT gratification, the cornerstone of business behaviour in the first decade of this century, appears to be losing its appeal. In the nineties and the noughties, global banking and finance set the tone with an attitude that could be summed up as ''we're here for a good time, not a long time''. Get in, get out, get the bonus, let someone else clean up.
Billionaires these days are born from dirt, from what the earth can yield in minerals and energy. And the overarching philosophy has turned towards creating resource powerhouses for the future, for the next decade and beyond.
It is a goal that necessarily has shifted the usual five-year time frame for senior executives to well into the future. Partly, that's because resource projects are so large, with such a massive delivery timetable. And partly it is because they cost so much.
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In the past few days that shift in attitude has been dramatically illustrated with three major corporate events: the proposed $US90 billion ($A83.5 billion) merger of Xstrata and Glencore, yet another multibillion-dollar expansion plan from Rio Tinto and BHP Billiton's decision to withhold a capital return to shareholders to help fund future growth. And during the coming year it would be entirely reasonable to expect a new wave of mergers and acquisitions as the incumbent resource giants snap up smaller rivals with quality operations, particularly in iron ore.
The rise of China to economic superpower status, and its demand for resources to lift its domestic living standards, has given rise to an almost Malthusian view of the world and a realisation that, given resources are finite, those that move quickly now will reap rewards down the track.
Under pressure last year from British institutions after a succession of hugely expensive but unsuccessful takeover bids, BHP chieftain Marius Kloppers reluctantly succumbed, delivering a special $US10 billion capital return to shareholders from the mountain of cash the company was generating.
Not this time. Even the dividend was slightly lower than expected.
Yesterday's first-half result from BHP, at a whisker under $US10 billion, was a rare retreat in the global giant's decade-long march to new records. But that had little to do with the decision to conserve capital.
Despite shrugging aside any suggestion that a merged Xstrata and Glencore represented any kind of threat, Kloppers is well aware that his fellow South Africans are preparing for a new assault on BHP with the ultimate goal of unseating the world's biggest miner from its exalted position.
That is why he is pouring cash into a dazzling array of expansions. On the numbers alone, it would be easy to dismiss Xstrata's ambitions as starry eyed optimism. After all, BHP earned more in the first half than a merged Xstrata and Glencore would pull in a year.
But only a fool would ignore Xstrata's rapid ascension into the upper echelon of global mining, and those running BHP are anything but foolish.
Xstrata's impeccably timed and incredibly cheap acquisition of Mount Isa-based MIM midway through last decade was the deal that catapulted it into the major league.
BHP wasn't prepared to allow that to happen a second time on its home soil. It trumped Xstrata's tilt at Western Mining Corporation, which ultimately resulted in the Big Australian grabbing control of the world's largest uranium deposit, Olympic Dam.
BHP and Rio Tinto, along with Vale of Brazil, dominate iron ore production and shipments. It is an area that has created the foundation for each company's rapid earnings growth. But it is an area in which Xstrata, which has built a massive trade in coking coal for steel making, noticeably lags.
It would be entirely reasonable to expect that it already would be scouring the globe for suitable targets even if its ''merger of equals'' with Zug-based cousin Glencore is not due to be wrapped up until September.
Xstrata recently acquired control of Australian-listed Sphere Minerals, which has three large iron ore projects in Mauritania on the west coast of Africa.
Andrew Forrest yesterday was an early beneficiary of the heightened speculation for a new round of takeovers. Fortescue Metal shares jumped to their highest level in five months. But operations such as New Hope, Atlas Iron and Pan Aust would also be in the potential firing line.
In the past 18 months, the costs involved in developing new mines from scratch has skyrocketed given shortages of machinery and the difficulty of bringing in labour for massive new developments.
Existing operations, however, have become cheaper, given the easing in commodity prices and weak equity markets.
Not surprisingly, the expansion strategies of the majors have skewed firmly towards purchasing a business that already has been built or expanding existing operations.
Rio Tinto yesterday announced plans to spend another $US3.4 billion expanding some of its West Australian iron ore operations, which includes an upgrade and expansion of its Port Lambert port and rail facilities.
Rio has outlined plans to boost iron ore production from Western Australia by 50 per cent, which it claims is on target. A massive new project in Guinea on Africa's west coast has proved far more problematic in recent years, not the least of which has been political upheaval.
It is not that the major resource houses are choosing to ignore a potentially calamitous outcome from the European debt situation, blithely pushing ahead despite the prospect of a global recession.
It is that the decisions they are making - using cash generated internally rather than debt - reach across that time frame, even for a worst-case scenario.""