Now WNI has wrapped up 46.24% of BRM. The goal is the reach over 50% of acceptances to gain control of the board and replace it with their nominees. With over 50% of acceptances I'm sure that BRM's current board would eventually accept WNI's offer. There is no point in fighting a downward and losing battle.
In the case of FRS, FRS's board is more warmer than BRM towards WNI's offer as WNI's condition of 90% of acceptances is dropped to 50%. They mentioned they will reconsider their recommendation if WNI gains control of BRM. I'm certain WNI will again extend their offers for both targets. AND I'm certain WNI's position is greater in having both BRM & FRS's assets. A combined Pilbara entity would be in a stronger position to negotiate for rail access and attract Chinese SOE investment than themselves being standalone businesses. I think China Railway Material Corp (currently a FRS holder) would be supportive of a combined BRM-FRS.
With them two targets gone. If you were AGO or BCI (or even WNI if they wanna expand more) and looking for targets to expand nearby in East Pilbara, what is left?
One small company with a pretty good project: DMA.
Unless they wanna expand in West Pilbara which isn't their turf, its dominated by CITIC Pacific, API (a JV controlled by AQA/AMCI), MCC and FMG. Lack of access of railway access is clear there.
Also, the Southeast Pilbara section is what I believe's AGO's expansionist hub. Their (AGO's) Southeast Pilbara tenements (inherited when they acquired Warwick Resources) + FRS's + DMA's would serve AGO's 2nd tier Southeast hub on top of its current main hub in East Pilbara Wodgina etc.
This would be a similar strategy (but a mini-version) of FMG's 3 hub strategy: West Pilbara, Central Pilbara, and East Pilbara. I have no doubt Hancock Prospecting, Atlas Iron and Aquila Resources (West Pilbara) are the 4th force in Australian iron ore.
DMA Price at posting:
20.0¢ Sentiment: Buy Disclosure: Held
